Weak Machinery Orders in Japan

Darlington Musarurwa
08 Apr, 2010
New York City

Japan

[R]5:00 AM New York, 7:00 PM Tokyo - Japan’s machinery orders unexpectedly fall 0.4% in February. Current account surplus soars 29.6% in the month. Bankruptcy in 2009 declined 8.7%.][/R]

Japan’s stock index fell 1.1% after machinery orders surprisingly fell in February.

The yen also strengthened as the euro retreated on the growing worries that Greece may default and uncertainty related to the EU led bailout.

In Tokyo trading Nikkei 225 Stock Average dropped 1.1% or 124.63 to 11,168.20, and the broader Topix Index fell 1% to 985.99.

In the first section of the Tokyo Stock Exchange 10.5 billion shares valued at 699 billion yen were traded and in the second section 250 million shares worth 2.6 billion yen changed hands.

Of the Nikkei 225 index stocks, 36 rose, 178 fell, and 13 were unchanged. Fuji Electric House led gainers in the index shares with a rise of 4.6% followed by JX HD rising 3.1%.

Machinery Orders Fall 0.4%

Japan’s Cabinet Office reported today that the total value of machinery orders received by 280 largest manufacturers operating in Japan decreased by 0.4% to 1.9 trillion yen in February from the previous month on a seasonally adjusted basis.

Total orders, however, rose 7.8% to 5.4 trillion yen in the December quarter and are expected to fell 1.9% to 5.3 trillion yen in the three months to March.

Private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, fell 5.4% to 684 billion yen in February and increased 0.5% to 2.1 trillion yen in the October to December period.

Private sectors are expected to gain 2% to 2.12 trillion yen in the January to March period.

Manufacturing orders decreased 0.3% to 289.9 billion in February and jumped 17.8% to 815.5 billion yen in the three months to December. Orders are estimated to advance 2.3% to 834 billion yen in the quarter ended December.

Non-manufacturing orders decreased 4% to 391.3 billion yen in February and fell 8.4% to 1.3 trillion yen in the December quarter, while orders are projected to increase 3.5% to 1.32 trillion yen in the March quarter.

In addition, government orders tumbled 21.2% to 209 billion yen in February, while orders fell 21.8% to 659 billion yen in the December quarter.

Government orders are expected to rise 2.6% to 676 billion yen in three months to March.

Japan’s Bankruptcies Fall in 2009

The number of companies filing bankruptcy protection totaled 14,732 in fiscal 2009, down 8.7% on the year and marking the first decline in four years, according to Tokyo Shoko Research Ltd.

Private research firm, Tokyo Research reported that the number of listed firm that went bankrupt fell to 7 in 2009 from 45 a year earlier as the economy gradually improves.
The report notes that combined debts fell 49% to 7.13 trillion yen.

Also the number of firms that filed protection dropped 14.5% to 1,314 in March from the comparable year ago period.

Current Account Surplus Soars 29.6%

Japan’s finance ministry said the country’s current account surplus increased 29.6% to 1.5 trillion yen in February on rising exports.

Exports advanced 47.3% to 4.8 trillion yen, gaining for the third straight month.

The balance of trade in goods and services posted a surplus of 693 billion yen from 69.3 billion a year ago, while the surplus in merchandise trade climbed 295.1% to 778 billion yen.

Nikkei Movers

Taisei Corp led the decliners in the Nikkei 225 Stock Average with a loss of 4.6% followed by losses in Mazda Motor Corporation of 4.3%, in The Furukawa Electric Co., Ltd of 3.6%, in Sumitomo Osaka Cement Co., Ltd 3.6% and in JTEKT Corporation 3.4%.

Fuji Electric Holdings Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 4.6% followed by gains in JX Holdings Inc 3.1%, in Oki Electric Industry Company, Limited of 2.3% and in Tosoh Corporation 1.6%.

Other Movers

Honda Motor Co., Ltd fell 1.8% to 3,265.00 yen.

JTEKT Corporation an auto-parts maker fell 3.4% to 1,144.00 yen.

Kubota Corporation the company makes industrial and farm machinery fell 2.3% to 848.00 yen.

Mazda Motor Corporation dropped 4.3% to 264.00 yen after the automaker Mazda China sales in March surged 55% to 22,023 vehicles from a year earlier. Mazda China sold 53,704 vehicles in first quarter, up 44% from a year earlier.

Mitsubishi Heavy Industries, Ltd fell 1.2% to 386.00 yen after the heavy machinery maker announced plans Wednesday to start U.S. production of windmills in order to reduce its shipping costs.

Nisshin Steel Co., Ltd the steelmaker decreased 1.0% to 196.00 yen.

Toyota Motor Corporation after the carmaker fell 1.8% to 3,690.00 yen.