TOKYO, April 20: The Nikkei average fell 0.19 percent on Thursday as record high oil prices hurt Oji Paper Co.
Ltd. and others sensitive to higher fuel costs.
Hoya Corp. fell after its quarterly results failed to meet analysts' expectations, while Credit Saison Co. Ltd. and other credit card companies dropped on a news report of possible cuts in their interest rates on loans.
Mitsui Corp. hit a lifetime high after the trading firm said it was mulling a capital outlay of $6.8 billion over the next two years to expand its natural-resource business.
A recent boom in such capital spending, together with brisk domestic consumption, fuelled a sharp increase in business confidence among Japanese manufacturers in April, a Reuters survey showed on Thursday.
Yasuo Yabe, director of sales at Meiwa Securities, said with U.S. crude prices at a record high above $72 a barrel, firms such as pulp and daily goods makers that cater to consumers will find it hard to pass on higher fuel costs in prices.
''Hikes in prices have so far been accepted because the economy is picking up and wages are increasing. But there will be a limit as to how much they can raise them,'' he said.
The Nikkei fell 32.59 points to 17,317.53. The TOPIX index rose 0.03 percent to 1,747.86.
Yoshinori Nagano, chief strategist at Daiwa Asset Management, said although the impact of higher oil prices on the overall market appeared to be limited for now, some sectors will likely feel the effect going forward.
''Airlines and shipper stocks have factored in higher fuel costs but oil prices have moved up to a different level and there will be more burden on these transportation stocks,'' he said.
Japan's biggest sea freight firm Nippon Yusen KK was unchanged at 713 yen and Japan Airlines Corp, Asia's biggest airline by revenue, also unchanged at 303 yen.
Shares of Oji Paper, Japan's top paper maker, dropped 2 percent to 686 yen. For every $1 rise in the price of crude, Oji estimates its cost base increases by 600 million yen. Its peer Nippon Paper Group Inc. fell 2.4 percent to 484,000 yen.
Meanwhile, some benefited from higher oil prices.
Nippon Oil Corp., Japan's largest oil distributor, added 1.5 percent to 961 yen. Its chairman said on Wednesday it may lift wholesale prices for oil products, including petrol, by about 4 yen per litre in May.
Mitsui rose 1.1 percent to 1,824 yen, after earlier hitting a lifetime high of 1,841 yen. Investors cheered the news on Mitsui's capital outlay.
Likewise, shares of larger rival Mitsubishi Corp. added 3 percent to 2,920 yen, its all-time high. The company plans outlays of 1.5-1.8 trillion yen over the next four years, mainly to build its energy and resources businesses, business daily Nihon Keizai said on Thursday.
Hoya declined 0.6 percent at 4,920 yen after it reported its quarterly operating profit rose 25.6 percent on strong demand for glass used to make chips, liquid crystal displays and hard drives, although the result was below analysts' expectations.
Yahoo Japan Corp. finished down 0.5 percent at 66,700 yen.
After the market closed, Japan's top Internet portal reported strong quarterly profits and forecast strong results in the current quarter.
Shares of credit card companies slid after the Nihon Keizai business daily reported they were cutting interest rates on loans as financial regulators debate possible legal changes that could cut maximum lending rates.
Nagano of Daiwa Asset Management said the news will likely weigh on the sector. ''The sector is standing directly against the wind. This is not going to change anytime soon.'' Credit Saison fell 3.3 percent to 5,920 yen and Marui Co.
Ltd., a department store which also issues consumer credit cards, tumbled 7.1 percent to 2,220 yen.
A close scrutiny of Japan's consumer loan industry has also raised concerns about profit prospects for consumer finance companies such as Promise Co. Ltd., whose shares extended losses on Thursday.
Promise sank 2.9 percent to 6,600 yen, extending a 4 percent loss from the previous session, while Acom Co. Ltd. also extended its 2.4 percent decline, down 4.1 percent to 6,350 yen.
Trade was slow, with 1.65 billion shares changing hands on the Tokyo exchange's first section, compared to last year's daily average of 2.07 billion shares. Decliners beat advancers by a ratio of nearly 2 to 1.