TOKYO (Thomson Financial) - Japanese shares were lower in early trade on Monday following steep declines on Wall Street after weak personal income and consumer spending data revived worries about the health of the world's largest economy.
A stronger yen may also weigh on investor sentiment. The dollar was last quoted at 108.47 yen, down from the 108.79-81 yen levels late on Friday.
Stocks were lower almost across the board as investors cashed in profits after the Nikkei gained more than 300 points in the previous session.
The U.S. Commerce Department said personal incomes fell last month by the largest amount in nearly three years. It reported that personal incomes fell by 0.7 percent in July, worse than the drop of 0.1 percent that analysts polled by Thomson/IFR had predicted.
The government also said consumer spending rose a modest 0.2 percent. That was below the 0.6 percent increase in June and, accounting for rising prices, spending fell by 0.4 percent in July.
But economists were more pessimistic about the prospect of consumer spending.
'With the tax refund effect on spending now more or less over, we think the worst is yet to come for consumers, and we expect an outright decline in real Q3 consumption,' said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
On Friday, the Dow industrials fell 171.63 points or 1.5 percent to 11,543.55, while the Nasdaq fell 44.12 points or 1.8 percent to 2,367.52.
At 0033 GMT, the Nikkei 225 Stock Average was down 181.52 points or 1.4 percent at 12,891.35. The broader Topix was 18.10 points or 1.4 percent lower at 1,236.61.
Early decliners included oil and shipping stocks. Gas and oil field developer Inpex Holdings shed 1.9 percent to 1.167 million yen, Nippon Oil lost 2.3 percent to 670 yen and Mitsui OSK Lines shed 2.6 percent to 1,274 yen.
Toyota Motor was down 1.4 percent at 4,860 yen, Sony shed 1.7 percent to 4,170 yen and major office equipment maker Canon declined 2.2 percent to 4,840 yen.
Shares of Mitsubishi Heavy Industries gained 1.1 percent to 532 yen after a Nikkei report said the heavy machinery maker will spend some 15 billion yen ($137.8 million) to increase its production capacity for core nuclear power equipment, in order to prop up its nuclear power business.
Video game maker Nintendo gained 3.5 percent to 53,600 yen as investors found comfort from news that the Kyoto-based maker of the Wii on Friday raised its earnings guidance for the full year to March 2009.
($1=108.45 yen)
masami.hachisu@thomsonreuters.com - hm/ng/hm/ng COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
A stronger yen may also weigh on investor sentiment. The dollar was last quoted at 108.47 yen, down from the 108.79-81 yen levels late on Friday.
Stocks were lower almost across the board as investors cashed in profits after the Nikkei gained more than 300 points in the previous session.
The U.S. Commerce Department said personal incomes fell last month by the largest amount in nearly three years. It reported that personal incomes fell by 0.7 percent in July, worse than the drop of 0.1 percent that analysts polled by Thomson/IFR had predicted.
The government also said consumer spending rose a modest 0.2 percent. That was below the 0.6 percent increase in June and, accounting for rising prices, spending fell by 0.4 percent in July.
But economists were more pessimistic about the prospect of consumer spending.
'With the tax refund effect on spending now more or less over, we think the worst is yet to come for consumers, and we expect an outright decline in real Q3 consumption,' said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
On Friday, the Dow industrials fell 171.63 points or 1.5 percent to 11,543.55, while the Nasdaq fell 44.12 points or 1.8 percent to 2,367.52.
At 0033 GMT, the Nikkei 225 Stock Average was down 181.52 points or 1.4 percent at 12,891.35. The broader Topix was 18.10 points or 1.4 percent lower at 1,236.61.
Early decliners included oil and shipping stocks. Gas and oil field developer Inpex Holdings shed 1.9 percent to 1.167 million yen, Nippon Oil lost 2.3 percent to 670 yen and Mitsui OSK Lines shed 2.6 percent to 1,274 yen.
Toyota Motor was down 1.4 percent at 4,860 yen, Sony shed 1.7 percent to 4,170 yen and major office equipment maker Canon declined 2.2 percent to 4,840 yen.
Shares of Mitsubishi Heavy Industries gained 1.1 percent to 532 yen after a Nikkei report said the heavy machinery maker will spend some 15 billion yen ($137.8 million) to increase its production capacity for core nuclear power equipment, in order to prop up its nuclear power business.
Video game maker Nintendo gained 3.5 percent to 53,600 yen as investors found comfort from news that the Kyoto-based maker of the Wii on Friday raised its earnings guidance for the full year to March 2009.
($1=108.45 yen)
masami.hachisu@thomsonreuters.com - hm/ng/hm/ng COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News
