Nikkei Closes Below 16,000 Following Economic Data Releases and News of Potential Curtailment of Margin Trading; ADRs Mostly Down (SANYY, KNBWY, MLEA, KUB, CAJ)

by: Steven Towns

On a day with a lot of economic data releases and news spreading that option trading may be curbed by the Tokyo Stock Exchange, both the Nikkei 225 Stock Average and TOPIX fell on the day. Stocks and the yen were also hurt by news that unemployment rose while household spending slid. CPI however rose by 0.1% in November. Bloomberg reported this is the first gain in consumer prices in two years and only the second gain over the past seven years. ADR trading could be very mixed today since U.S. exchanges were closed yesterday and Japanese exchanges have had two trading days. Trading volume in Tokyo was lower because of the absence of foreign traders over the Christmas holiday.

More details on the economic data releases courtesy of Bloomberg reporting:

    • Japan's households spent less in November as disposable incomes slid, and unemployment rose as more people entered the labor market to seek work in the second-largest economy.

    • Spending by households headed by a salaried worker fell 0.7 percent to 307,309 yen ($2,625), seasonally adjusted from October, the statistics bureau said in Tokyo today.

    • Unemployment rose to 4.6 percent, higher than the median estimate of 4.3 percent by 30 economists in a Bloomberg survey.

    • The Bank of Japan has forecast core prices to rise 0.5 percent next fiscal year.

    • The BoJ has said it won't change its deflation-fighting policy until three conditions are met: core consumer prices stop falling for at least a few months; policy makers are sure they won't resume sliding; and the bank is confident about the overall strength of the economy.

Nikkei 225: -138.27 (-0.86%) closed at 15,969.40, opened 73+ points lower than prior close of 16,107.67, intra-day high of 16,079.18, low of 15,962.73

TOPIX: -11.01 (-0.67%) closed at 1,637.93, opened 3+ points lower than prior close of 1,648.94, intra-day high of 1,648.52, low of 1,636.65

JASDAQ: +0.31 (+0.25%) closed at 125.44, traded between 124.48 and 125.79

: last posted rate Y116.97/US$1

Today’s ADRs to watch based on earlier trading of underlying shares in Tokyo:

* Advancers: Sanyo Electric (SANYY) +6.15%

* Decliners: Kirin Brewery (KNBWY) -2.09%, Millea Holdings (MLEA) -1.92%, Kubota (KUB) -1.75%, Canon (CAJ) -1.55%