5:00AM New York, 7:00PM Tokyo - Japan consumer price index increased 0.8% in January, monthly household spending rose 3.6% in real terms, and jobless rate was same as in December at 3.8%. IHI Corp. and Toshiba Corp are exploring to merge nuclear businesses generating 1 trillion yen.

Stock averages in Japan ended the week lower after a rising yen took its toll on exporters and on a government report that showed housing starts declined 5.7% on the year in January.

Market Sentiment

In Tokyo trading Nikkei 225 dropped 2.32% or 322.49 at 13,603.02, and the broader Topix Index fell 2.1% or 28.82 to 1,324.28.

In the first section of the Tokyo Stock Exchange 8.8 billion shares worth 1 trillion yen were traded and in the second section 300 shares valued at 4.1 billion yen changed hands.

Of the Nikkei 225 stocks 31 gained, 190 declined, and 4 were unchanged. Sky Perfect JSAT led advancers in the Nikkei 225 index shares with a rise of 2.98% followed by Asahi Breweries increasing 2.79%.

CPI rises 0.8% in January

The Statistics Bureau reported today that Japan’s core consumer price index, excluding fresh food rose 0.8% from a year ago in January.

Food prices rose 0.6% and 0.5% from the previous month and year respectively. However, housing was unchanged for both the month and year. Fuel, light and water charges gained 0.8% on the month and 3.7% from the previous year, while furniture and household utensils fell 0.1% for the month and declined 1.60% from the previous year.

Clothes and footwear slipped 6.9% from the previous month but rose 0.8% from a year earlier. Transport and Communication shed 0.1% on the month and rose 2.6% on the year.

CPI in Ku-area rose 0.4% in February

According the statistics office, preliminary consumer prices in the Ku-area of Japan fell 0.2% from the previous month in February and increased 0.4% from the previous year. Food shed 0.2% from a month earlier but advanced 0.8% from a year ago. However, housing was unchanged.

While fuel, light and water charges were unchanged for the month, the utilities rose 1.5% from 2006. Furniture and household utensils slid 0.9% and 2.9% for the month and year respectively.

Statistics also showed that clothes and footwear declined 3% from the previous month and fell by 1.2% from a year ago.

In addition, transport and communication slipped 0.5% from January and increased 1.6% from 2006.

Incomes fall, Expenditures Rise

The Statistics Bureau also revealed in a separate report on the Family Income and Expenditure Survey that the average monthly consumption expenditures per two or more family household rose 4.5% in nominal terms and 3.6% in real terms from the previous year in January to 309,826 yen. Household spending accounts for 55% of gross domestic product in Japan.

For worker’s households, the average amount of monthly income per household declined 0.5% in nominal terms and 1.4% in real terms from a year earlier to 438,998 yen.

Consumption expenditures further increased 3.9% and 3% in nominal and real terms correspondingly to 341,138 yen.