Nikkei Falls as Japanese Unemployment Inches Higher and Wages Sink

Before you go, we thought you'd like these...
Before you go close icon
Sapporo BeerShares tumbled in Asia Wednesday. In Japan the Nikkei 225 Index fell 2% to 9,383 and in China the Shanghai Composite Index dropped 1.2% to 2,398. Hong Kong's Hang Seng Index declined 0.6% to 20,129.

Japan suffered a double whammy today with unemployment for May increasing for the third straight month, and wages for those in jobs declining 0.2%. According to government data, Japanese unemployment peaked last July at 5.6% -- quite close to the 5.2% we're seeing now. And according to the Labor Ministry, monthly wages in Japan are now $3,020, including overtime and bonuses, reports Bloomberg. "The steep economic recovery, which was recently observed, has already come to an end," Hideki Matumura of the Japan Research Institute told the Japan Times.

With wages down and more people out of work, most Japanese just aren't in a buying mood and Japanese retailers sank today. UNY, the sensible department store that sells everything from rice cookers to underwear, dived 4.1%, Fast Retailing, the proud owner of the Uniqlo chain, plunged 3.3%, Marui, which runs several department stores, dropped 3.5%, upscale Takashimaya declined 3.1% and Aeon, which operates a string of convenience stores and clothing shops fell 2%.

Beer makers and sellers are feeling the squeeze. According to one survey, Japanese salarymen have decreased the money they spend on their after-work pint by 20% this year, reports Bloomberg. Shares in Daisyo, which runs Japanese-style pubs including the Japanese BBQ restaurant Shoya, fell 2.1% today and have been sliding every month for nearly two years. Sapporo Holdings, which produces world-famous Sapporo Beer as well as other alcoholic drinks and tea and coffee, nosedived 6.3% today.

Another big loser in Japan was Oki Electric Industry, which slid 7.2%. The company makes computers and other electronic devices and is nearly fully owned by Rohm Co, maker of components for Nintendo's new 3DS game player.

In China pessimism about the growth rate of the economy sent raw material producers lower. Jiangxi Copper slumped 5.7%, Chalco, or Aluminum Corp. of China, dropped 3% and Zhuzhou Smelter, a zinc producer, slid 2.7%.

Chinese real estate shares also took a hit with Poly Real Estate Group declining 3.8% and Gemdale down 1.9%.

In Hong Kong, heavily weighted blue chip stocks were down. HSBC fell 1.1% and Li & Fung tanked 3.4%. But today's worst performer was Foxconn, which plunged 7%. Today the company reported that its losses for the first half will be even higher than last year's $19 million, reports Wall Street Journal. The company is blaming the shortfall on higher labor costs and falling prices in the mobile phone market.

Gold miners rose in Hong Kong with Real Gold Mining surging 2.5%, and Zijin Mining advancing 1% -- a welcome bright spot in today's trading.
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners