In Tokyo trading Nikkei 225 fell from a 0.3% gain in the morning session to close down 0.99% or 133.83 to 13,345.03 while the broader Topix Index reversed a 0.8% gain to drop 0.7%to 1,320.11.

Of the Nikkei 225 stocks 61 gained, 151 declined, and 13 were unchanged.

In the first section of the Tokyo Stock Exchange 10.9 billion shares worth 1.2 trillion yen were traded and in the second section 1.1 billion shares worth 7.6 billion yen changed hands.

The Ministry of Economy Trade and Industry reported today in its indices of industrial production preliminary report for December that industrial production rose for the first time in two months to 1.4% in December from November and gained 0.7% from the previous year to a seasonally adjusted 111.9.

Economists had forecasted that production index rise of 2%.

Industries that contributed to a rise in production included electronic parts and devices, general machinery and plastic products. Production of large passenger cars, flat panel display equipment and lithium ion storage batteries also significantly impacted on the increase.

METI also reported that shipments increased in December for the first time in two months by 1.6% from the previous month and 3.12% from a year ago to a seasonally adjusted figure of 116.9 buoyed by transport equipment, general machinery and iron and steel in that order.

Inventories however declined 0.5% from a month earlier for the first time in five months and 0.7% from the previous year dragged down by transport equipment, information and communication electronics equipment and chemicals.

According to the survey of production forecast, manufacturing expected to fall 0.4% in January weighed down by transport equipment, fabricated metals and chemicals respectively.

In addition production is expected to drop in February by 2.2% due to falls in electronic parts and devices, electrical machinery and general machinery.

The IMF forecasted yesterday in the World Economic Outlook Update report that global growth is expected to decelerate to 4.1% this year from 4.9% in 2007, a 0.3% decline from the October forecast.

The U.S. economic growth projection was revised downwards from 2.2% in 2007 to 1.5% in 2008, while China is expected to slow from 11.4% in 2008 to 10% and Europe to 1.6%. Latin America will grow at a slow pace at 4.3% in 2008 from 5.4% in 2007.

Of the Nikkei 225 index shares Electrical Industries led advancers with a rise of 8.55% followed by gains in Chiyoda Corporation of 6.83%, in Hino Motors Limited of 6.46%, in Mitsui OSK Lines of 5.93%, and of Advantest Corporation of 5.63%.

Shipping lines rose as well. Kawasaki Kisen jumped 2.47% and Mitsui Engineering and Shipbuilding climbed 3.60%.

Consumer credit companies gained after Promise Company reported yesterday that third quarter net income rose to 13 billion yen from a 9.4 billion yen loss recorded a year ago in the same period. Credit Saison rose 2.64% and Mitsubishi UFJ Nicos soared 4.03%.

Sumco Corporation led declining Nikkei 225index shares with a drop of 7.82% followed by losses in Nisshin Seifun of 5.21%,in Hokuetsu Paper of 5.10%, in Toto Limited of 4.99%,and in Shin-Etsu Chemical of 4.79%.

Domestic related shares fell after METI reported that industrial production will decline in January and February.

Citigroup and Nikko Cordial announced in joint statement yesterday that Citigroup has completed the acquisition of Nikko through a share swap deal worth $4.8 billion at a rate of 0.602 Citigroup stock for each of the Japanese brokerage share. Also Douglas Peterson was announced as the new Chief Executive Officer and President.

The Nikkei news online reported today that Mizuho Securities Company will likely book a loss that is twice its November projections at 250 billion yen.

Sumitomo Mitsui Financial Group reported yesterday that the company’s profit fell from 319.4 billion yen in the nine months to December from 396.05 billion yen the same time a year earlier. The company recorded a 99 billion loss in subprime related investments.

However it maintained its forecast for the fiscal year profit ending March 2008 at 570 billion yen. The stock closed up 2.66%.