5:00AM New York, 7:00PM Tokyo - Japan trade surplus narrows 7.6% in May. U.S. auto sales are likely to fall below 15 million.

Stocks in Japan fell as the worrying economic data from U.S. took its toll on exporters. In particular consumer confidence plummeted to a 16-year low in May, while house prices declined in April. Financial stocks fell as well.

Market sentiment

In Tokyo trading Nikkei 225 fell 0.14% or 19.64 at 13,829.92, and the broader Topix Index slid 0.2% or 3.11 at 1,346.08.

In the first section of the Tokyo Stock Exchange 8.8 billion shares valued at 904 billion yen were traded and in the second section 236 million shares valued at 3.6 billion yen changed hands.

Of the Nikkei 225 stocks 90 rose, 121declined, and 14 were unchanged. UBE Industries led advancers in the index shares with a rise of 8.05% followed by Shionogi & Co Ltd. increasing 4.13%.

Japan’s exports rise 3.7% in May

Japan’s Ministry of Finance said that exports rose for the 54th consecutive month by 3.7% to 6.8 trillion yen from a year earlier in May. Economists expected a 1.9% gain.

Shipments to Asia and China increased 8.1% and 12.3% correspondingly from the same time a year earlier driven by exports of cars, steel and oil products.

Analysts note that exports to Europe declined for the first time in two years, plummeting 1.1%, while exports to Russia spiked 58.8%.

Trade surplus with the United States fell 11%, ninth monthly decline in a row, with exports dropping 9.5% to 1.1 trillion yen.

Imports in the month under review also advanced for the eight straight month by 4.4% to 6.4 trillion yen.

On the overall, Japan’s customs-cleared trade surplus fell 7.6% to 365.6 billion yen in May from a year earlier, decline for the third consecutive month. Also market watchers previously projected that the surplus would top 30 billion yen.

US consumer confidence slumps in June

The US Conference Board said that the Consumer Confidence Index fell to a 16-year low at 50.4 from 58.1 in May. Also the Present Situation Index declined to 64.5 from 74.2, while the Expectations Index dropped to 41.0 from 47.3 in May.

Lynn Franco, Director of The Conference Board Consumer Research Center commented, ""This month''s Consumer Confidence Index is the fifth lowest reading ever. Consumers'' assessment of present-day conditions continues to grow more negative and suggests the economy remains stuck in low gear. Looking ahead, consumers'' economic outlook is so bleak that the Expectations Index has reached a new all-time low. Perhaps the silver lining to this otherwise dismal report is that Consumer Confidence may be nearing a bottom.""

US. home prices fall 15.3% in April

The S&P/Case-Shiller home-price index fell 15.3% in April from a year earlier after a 14.3% drop in March. The metropolitan home prices fell in every twenty metropolitan locations and Las Vegas and Miami led the decline with a fall of nearly 27%.

Gainers & Losers

UBE Industries led advancers in the Nikkei 225 index shares with a rise of 8.05% followed by increases in Shionogi & Co. of 4.13%, in Toyota Tsuho of 3.59%, in Nippon Yusen of 3.46%, and Furukawa Co Ltd of 3.24%.