Industry
Update

The average price of a new condominium in Tokyo and its three surrounding prefectures fell 5.4 percent from a year earlier to 97.70 million yen ($628,000) in August for the first decline in five months, a research institute said Thursday.


The drop in the overall average price for the capital and Chiba, Kanagawa and Saitama prefectures came as rising land prices in central Tokyo made it harder for developers to acquire sites, reducing overall condominium supply and the share of high-end properties, according to the Real Estate Economic Institute.


By area, the average price in Tokyo’s 23 wards edged up 0.1 percent from a year earlier to 138.21 million yen, while western Tokyo, outside the 23 wards, saw a 2.5 percent increase to 66.78 million yen.


The price rose 15.6 percent to 68.40 million yen in Saitama Prefecture, 10.6 percent to 73.09 million yen in Kanagawa Prefecture and 9.1 percent to 67.02 million yen in Chiba Prefecture, the institute said.


The number of new condos listed for sale in the greater metropolitan area covering Tokyo and its three surrounding prefectures slid 12.4 percent to 1,140 units, with the capital’s 23 wards seeing a 30.7 percent plunge to 478 units.


As land prices in central Tokyo remain high, the shortage of sites is expected to persist. An institute official said, ”The average price could fall if more condos are put on the market in suburban areas.”

Japan’s cabinet on Tuesday approved a policy to lower the consumption tax on food items.The tax will be cut to 1 percent from April 2027 for two years. It currently stands at 8 percent.

The policy document describes the tax relief as a temporary measure responding to high commodity prices.

The government will also introduce benefits for low- and middle-income earners. It says this will make the tax effectively zero.

The yen sank to an eight-month low in the lower 152 range against the U.S. dollar early Wednesday on selling fueled by concerns over Japan’s deteriorating fiscal health and receding expectations of an imminent interest rate hike by the Bank of Japan.


The yen has weakened sharply this week after Liberal Democratic Party lawmaker Sanae Takaichi, known as a fiscal dove and proponent of easy monetary policy, was chosen as the party’s leader, making her likely to become the next prime minister later this month.


At 9 a.m., the dollar fetched 152.04-08 yen compared with 151.85-95 yen in New York and 150.62-64 yen in Tokyo at 5 p.m. Tuesday.


The euro was quoted at $1.1652-1654 and 177.16-23 yen against $1.1653-1663 and 177.08-18 yen in New York and $1.1676-1677 and 175.87-91 yen in Tokyo late Tuesday afternoon.


Tokyo stocks were mixed as buying of some exporter shares on the persistent yen weakness was offset by selling after overnight Wall Street losses.


In the first 15 minutes of trading, the 225-issue Nikkei Stock Average fell 58.45 points, or 0.12 percent, from Tuesday to 47,892.43. The broader Topix index was up 23.20 points, or 0.72 percent, at 3,251.11.


On the top-tier Prime Market, the main gainers were farm and fishery stocks as well as insurance shares, while chemical and glass, and ceramics product issues were among the notable decliners.

The average overall price of land in Japan as of July 1 rose 1.5 percent from a year earlier, marking the sharpest growth since 1992, boosted by solid housing demand and inbound tourism, government data showed Tuesday.


The price climbed for the fourth straight year, also lifted by robust investment demand from overseas on the back of the weak yen. Commercial land prices gained 2.8 percent with launches of new hotels and stores in urban areas amid a surge in foreign tourists.


”Investment demand from foreigners is growing for condominiums in central Tokyo and resort areas in Hokkaido” in northern Japan, said an official of the Ministry of Land, Infrastructure, Transport and Tourism.


Prices for residential land increased 1.0 percent due to strong demand for residences in urban areas, as well as for employee dormitories in resort areas. However, some places experienced sluggish growth due to soaring construction costs.


Among residential areas, Furano, near Hokkaido’s ski areas and a popular destination for overseas investors developing resorts, saw the sharpest growth of 27.1 percent.


The ministry said that Chitose, in Hokkaido, which houses a Rapidus Corp. semiconductor plant, saw the fastest growth in commercial areas, at 31.4 percent.


The average land price increased by 4.3 percent in Tokyo, Osaka, and Nagoya, seeing larger growth in both residential and commercial areas.


For the third consecutive year, regional land prices increased, with residential areas rising 0.1 percent and commercial areas climbing 1.0 percent.


Prices for residential land increased in 20 of Japan’s 47 prefectures, up by three from the previous year, while 26 saw declines.


The Meidi-ya Ginza commercial building site in Tokyo’s Ginza shopping district fetched the highest price per square meter of 46.9 million yen ($320,000), topping the list for the 20th consecutive year.


After 1992, land prices had been on a downward trend due to the bursting of the country’s asset price bubble. However, they have been on an upward trend in recent years after recovering from the financial crisis triggered by the collapse of Lehman Brothers Holdings Inc. and the coronavirus pandemic.

Tokyo stocks rose Friday, lifted by eased uncertainty over U.S. tariffs after President Donald Trump signed an executive order formally implementing a Japan-U.S. trade deal reached in July.


The 225-issue Nikkei Stock Average ended up 438.48 points, or 1.03 percent, from Thursday at 43,018.75. The broader Topix index finished 25.14 points, or 0.82 percent, higher at 3,105.31.


On the top-tier Prime Market, the main gainers were precision instrument, iron and steel and rubber product issues.


The U.S. dollar weakened to the lower 148 yen range in Tokyo as the yen was bought on speculation that the Bank of Japan could soon hike interest rates after government data earlier in the day showed that Japan’s real wages turned positive in July for the first time in seven months, dealers said.


At 5 p.m., the dollar fetched 148.21-23 yen compared with 148.43-53 yen in New York and 148.37-38 yen in Tokyo at 5 p.m. Thursday.


The euro was quoted at $1.1676-1678 and 173.06-10 yen against $1.1647-1657 and 172.92-173.02 yen in New York and $1.1649-1651 and 172.84-88 yen in Tokyo late Thursday afternoon.


The yield on the benchmark 10-year Japanese government bond ended at 1.570 percent, down 0.030 percentage point from Thursday’s close, as the debt was bought following a decline in U.S. Treasury yields.


Stocks were bought as investors were relieved by the order stating the United States will reduce its levies on automobiles from Japan to 15 percent from the current rate of 27.5 percent, in line with the trade agreement.


Auto shares drew buying as sentiment was also buoyed by comments from Japan’s top tariff negotiator Ryosei Akazawa, on the timing of the lowered auto tariff rate going into effect, saying, ”it shouldn’t take two weeks from now,” brokers said.


”Investors welcomed clarification on points that had been unclear, including when exactly the tariffs would take effect and whether 15 percent would be added on top of the existing rate,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.


The market was also supported by overnight gains on Wall Street amid growing expectations that the U.S. Federal Reserve will cut its rates this month.


After the benchmark Nikkei index climbed above 43,200 at one stage, some investors locked in gains and moved to await the key U.S. jobs data for August due later in the day.