5:00AM New York, 7:00PM New York - Nikkei drops 2.3% for the week. Tokia Carbon soared 11%.

Stocks in Japan fell for the twelfth consecutive trading session totaling 8.4% in the period, longest in the 54 years. Realty stocks tumbled on lingering credit market worries.

Market Sentiment

In Tokyo trading Nikkei 225 declined 0.21% or 27.51 at 13,237.89, falling 2.3% for the week, and the broader Topix Index shed 0.01% or 0.14 at 1,297.88, declining 1.7% in the week.

In the first section of the Tokyo Stock Exchange 18 billion shares worth 1.9 trillion yen were traded and in the second section 298 million shares valued at 5 billion yen changed hands.

Of the Nikkei 225 stocks 12 rose, 201 declined, and 12 were unchanged. Tokai Carbon Co. led gainers in the index shares with a rise of 11.42% after raising electrode prices for export by about 70% on increasing demand in emerging markets.

Companies Forestall Recession

Bloomberg News reported on its Web site today that Economy and Fiscal Policy Minister Hiroko Ota said in an interview that strong corporate growth in Japan has been able to forestall a recession this year as global turmoil continues to take its toll on the financial markets.

She added that companies have been able to buttress their position by shedding debt, slashing “bloated workforces” and getting rid of extra capacity. Government believes that the country doesn’t have the risk of secondary inflation due to stalled wage growth.

According to Ota, inefficiency among service companies is preventing them from increasing wages, which has negatively impacted on consumer spending.

Caution over Corporate Tax Revision

The online edition also reported that Japan’s new vice finance minister Kazuyuki Sugimoto said today the Government needs to take into account the country’s precarious fiscal situation before it slashes corporate taxes. Currently Japan’s company tax at 40.7% is the highest among the G8 countries.

Sugimoto said corporate tax base and health care costs must be reviewed together when discussing the tax.

Gainers & Losers

Tokai Carbon Co. led advancers in the Nikkei 225 index shares with a rise of 11.42% followed by increases in GS Yuasa Corp. of 4.84%, in Taiyo Yuden of 4.70%, in Mazda Motor of 4.56%, and Sumitomo Heavy Industries of 4.15%.

Tokai Carbon Co. rose after reporting today that it will raise the electrode prices for export by about 70% on rising demand in emerging markets.

Asahi Breweries led decliners in the Nikkei 225 index shares with a fall of 4.33% followed by losses in Tokyu Land Corp of 4.12%, in Secom Co. Ltd of 3.79%, in Pioneer Corp. of 3.51%, and Sumitomo Realty of 3.04%.

Asahi slumped after Morgan Stanley cut the rating on the company’s stock from “overweight” to “equal weight.”

Realty stocks fell on lingering worries of global market losses.

World Markets Review