Japan Exports Surge; Toyota Rating Lowered

Darlington Musarurwa
22 Apr, 2010
New York City

A surge in exports in March lifted trade surplus in Japan for the month and for the year. The surplus for the fiscal year rose to 5.2 trillion yen from a deficit of 64.8 billion yen last year. Hitachi Ltd quarterly sales surged 42%. Rating agency lowered its view on Toyota debt with a negative view.

[R]7:00 PM Tokyo – A surge in exports in March lifted Japan’s trade surplus for the month and for the year. The surplus for the fiscal year rose to 5.2 trillion yen from a deficit of 64.8 billion yen last year. Hitachi Ltd quarterly sales surged 42%. Rating agency Moody’s lowered its view on Toyota debt with a negative outlook.[/R]

While the current accommodative policy maybe appropriate, if deflation persists Japan may have to consider further stimulus as per an IMF report.

France’s biggest bank BNP Paribas hired more than 20 analysts and sales traders to resume coverage of Japanese stocks since it accounts for 10% of the worldwide equities market.

Japan’s benchmark index dropped as the yen rose to as much as 92.74 against the dollar from 93.23 yesterday.

Losses were however trimmed as the country’s exports rose in March and Hitachi Ltd corporate earnings soared on rising demand of hard-disk drives.

In Tokyo trading Nikkei 225 Stock Average fell 1.3% or 150.96 to 10,949.09, and the broader Topix Index dropped 0.9% to 978.17.

In the first section of the Tokyo Stock Exchange, 10.8 billion shares worth 736 billion yen were traded, and in the second section 231 million shares valued at 3.4 billion yen changed hands.

Of the Nikkei 225 index stocks, 38 increased, 175 fell, and 9 were unchanged. Clarion Co. Ltd led gainers in the index shares with a rise of 3.7% followed by Ricoh Co Ltd advancing 3.4%.

Japan’s Exports Surge 44% in March

Japan’s exports soared 43.5% to 6.01 trillion yen on rising demand from rest of Asia, gaining for the fourth straight month according to the ministry of finance.

Economists were looking for exports to rise as much as 47.2% in the period.

Imports increased 20.7% to 5.1 trillion yen, yielding a trade surplus of 948.9 billion yen in March from a 540 billion yen deficit in the comparable period a year ago.

Overall, exports dropped 17.1% to 59 trillion yen for the fiscal year ending March, while imports decreased 25.2% to 53.8 trillion yen.

The surplus for the fiscal year rose to 5.2 trillion yen from a deficit of 64.8 billion yen last year.

Hitachi Ltd Q1 Sales Surges 42%

Hitachi Ltd, the world’s third largest manufacture of hard-disk drives said revenues in the first quarter ended March rose 42% to $1.5 billion from $1.03 billion from a year earlier.

Gross margin climbed 28.9% to $422 million from a year ago, while operating profit rose to $217 million from a loss of $57 million in the first quarter of 2009.

Toyota’s Long-Term Debt Rating Downgraded

Japan Today reported that Moody’s Investors Service today downgraded Toyota Motor Corp. debt by one notch from Aa1 to Aa2 with a negative outlook.

Moody’s Vice President Tadashi Usui said, “The rating action reflects the ongoing levels of profitability evident at Toyota. Moreover, its product quality and recall challenges- largely centered in the United States- have created significant uncertainty over whether it can maintain the pricing power it has historically achieved over its rivals.”

Nikkei Movers

Nitto Boseki Co Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 3.3% followed by Mizuho Trust & Banking Co Ltd 3.0%, Trend Micro Incorporated 2.8%, Shin-Etsu Chemical Co Ltd 2.7% and Kobe Steel Ltd 2.7%.

Clarion Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 3.7% followed by Ricoh Company Ltd 3.3%, Oki Electric Industry Company Limited 3.3% and Uny Co Ltd 3.1%.

Other Movers

Marubeni Corporation dropped 1.7% to 565 yen after the trading house said rubber prices may drop as much as 22% by the end of 2010 as this month’s record rally was too steep for tire makers.

Mitsubishi Electric Corporation slipped 1.4% to 824.00 yen.