5:00AM New York, 7:00PM Tokyo – January wages in Japan rose 1% from a year ago. Dollar fell sharply in Japan and against Asian currencies. Takefuji Corp took 30 billion yen charge on derivative losses.

Stocks in Japan fell sharply on widening credit market losses as Takefuji Corp became the first Japanese consumer lender to be caught up in the credit market turmoil. Fears that the U.S. will fall into a recession and a sharp decline of dollar against Asian currencies sparked worries of slowing exports and rising inflation.

Market Sentiment

In Tokyo trading Nikkei 225 slipped 4.49% or 611.84 to 12,992.18 and the broader Topix Index fell 4% or 53.13 to 1,271.15.

In the first section of the Tokyo Stock Exchange 10 billion shares worth 1.1 trillion yen were traded and in the second section 223 million shares valued at 3.5 billion yen changed hands.

Of the Nikkei 225 stocks 7 gained, 216 declined and 2 were unchanged. Sky Perfect JSAT led advancers in the Nikkei 225 stocks with a rise of 4.65% followed by Nippon Telegraph increasing 3.30% after reporting that profit at its two regional units will rise.

Wages rise 1%

Japan’s Ministry of Health, Labor and Welfare reported today in its Provisional Report of Monthly Labor Survey that total cash earnings for industries with three or more employees increased 1% in January from a year earlier to 280,550 yen for industries.

In the month, contractual cash earnings edged higher 0.5% in the same month to 267,928 yen, while scheduled earnings rose 0.8% to 263,119 yen.

Non-scheduled cash earnings for industries, however, slumped 1.4% from a year ago to 30,526 yen.

The wage increase was attributed to companies deferring payment to January from the end of last year.

For industries with 30 or more employees, total cash earnings advanced 1.6% to 311,375 yen. Contractual cash earnings rose 1.1% to 134.156 yen, while scheduled earnings grew 0.6% to 273.189 yen.

Non-scheduled earnings for January also plummeted 0.4% to 25.772 yen.

Takefuji Corp losses 30 billion yen on derivatives

Takefuji Corp reported today on its web site that it was notified by Merrill Lynch Japan Securities Co., Ltd. that the liquidation of the structured finance transaction arranged by them of 30 billion yen''s worth of unsecured domestic straight bonds has commenced.

According to the company, “the market value of the bonds fell in conjunction with the deterioration of the credit environment and the rapid worsening of liquidity for the bonds incorporated in the structured finance transaction”.

The consumer lender is now expected to revise downwards in annual profit forecast from 43.3 billion yen made in February on the losses related to liquidation are expected to reach 30 billion yen.

Fukuda courts opposition over BOJ Governor

The Nikkei news reported today that Prime Minister Yasuo Fukuda is calling on the opposition Democratic Party of Japan to cooperate with the government over the appointment of the next Bank of Japan governor.

Last week, DPJ blocked the nomination of the successor of Bank of Japan.