By Laura He and Michael Kitchen, MarketWatch
HONG KONG (MarketWatch) -- Japan received some mixed economic
data on Friday, but stocks slid anyway, mostly due to a stronger
yen.
The Nikkei Average retreated 1.4%, marking its biggest drop
since mid-May. The closing level of 15,095.00 was the lowest in
more than week. For the week, the index posted a 1.7% loss,
snapping a five-week winning streak.
The broader Topix index settled 0.8% lower on Friday.
Slamming equities was a stronger yen (USDJPY), which traded at
Yen101.42 per dollar from Yen101.66 per dollar on Thursday.
On the same day, Japan's official data showed the country's
unemployment rate dropped to 3.5% in May, the lowest level since
1997, and the May core consumer-price index rose 3.4% from a year
earlier, in line with market forecasts.
However, household spending fell a price-adjusted 8% in May
compared with a year earlier, indicating the shadow of the
consumption-tax hike still looms. The fall was much worse than a 2%
decrease forecast by economists in a Wall Street Journal poll.
Meanwhile, other Asian markets closed lower. The Shanghai
Composite Index inched down 0.1%, Sydney's S&P/ASX 200 declined
0.4%, and South Korea's Kospi Composite index lost 0.3%. However,
Hong Kong's Hang Seng Index picked up 0.1%.
In Japan, tech exporters were among top underperformers, with
semiconductor manufacturer Renesas Electronics Corp. down 3.3%, IT
service provider Fujitsu off 2%, and industrial robot maker Fanuc
Corp. lower by 1.9%.
Other market movers included Standard Chartered PLC , which
tumbled 4.5% in Hong Kong trading, after the bank issued a profit
warning.
China data: Slowdown surfaces in profit numbers
Chinese data are out on overall earnings at the nation's largest
industrial corporations, with growth still strong but slowing.
For May, profit was up 8.9% from a year earlier, a robust pace
but still 0.7 of a point below what it was in April.
More importantly, the gains are lagging what major Chinese
enterprises saw last year. Much of the profit data are reported on
a cumulative basis, and on those terms, the January-May profit
growth was 9.8%, marking the only time the number has fallen below
10% in the past 12 months, with the exception of this year's
January-February Lunar New Year period -- always a slow time --
when the expansion rate cooled to 9.4%.
The fact that industrial profit rose 12.2% last year underlines
the slowdown now facing Chinese companies.
Then again, not all types of enterprise are equal: Private
companies managed a 12.9% profit gain, foreign-funded companies
(including, for the data's purposes, those from Hong Kong and
Macau) saw their earnings rise 12.4%, but the state-owned
corporations saw profit improve by a slim 3.4%.
(Some material in this report is from MarketWatch's Asia Stocks
blog.)
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