Machinery Orders Rise in Japan

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
09 Jun, 2010
New York City

The stocks in Japan fell on global worries despite stronger than estimated machinery orders in April. The stocks declined even after Prime Minister Naoto Kan pledged yesterday to help revive the economy hamstrung by persistent deflation and a huge public debt.

[R]5:00 PM Tokyo, Japan – Stocks in Japan declined on global worries and a cautious statement from a rating agency on the UK debt. Machinery order climbed more than estimated in April. Honda stops production at two plants in China as strike continues in a parts plant.[/R]

The stocks in Japan fell on global worries despite stronger than estimated machinery orders in April. The stocks declined even after Prime Minister Naoto Kan pledged yesterday to help revive the economy hamstrung by persistent deflation and a huge public debt.

Nikkei 225 Stock Average fell 1% to 9,439.13 at the close and the broader Topix lost 0.9% to 850.37 with more than twice as many shares dropping as gaining. Of the stocks in Nikkei 225 Stock Average, 38 increased, 174 declined and 13 were unchanged.

Prime Minister Naoto Kan at his first press conference said yesterday stressed his modest personal background should help him perform well for the society.

“The nation’s public debt, which is a major worry now, will rise even if the government bond sales remain at the current fiscal year’s cap of 44 trillion yen. This is the biggest issue the country needs to tackle and must be discussed beyond party considerations,” said Kan in the course of his speech.

Kan retained 11 cabinet ministers from the previous government seeking to demonstrate stability before mid-term elections in July that is seen as a referendum on the ruling party’s nine months in power.

The continuation of strike at Foshan Fengfu Autoparts Co has forced Honda Motor Co to halt production at two of its plant in China, said Yoshiyuki Kuroda, spokesman for Honda in Tokyo today.

Machinery orders climbed at 4% in April from March, the Cabinet Office said in Tokyo today. The Cabinet Office upgraded its assessment of machine orders for a second consecutive month in April, after signs of a pickup were seen after the orders stopped falling in March. The orders were 9.4% higher than a year earlier.

Two former traders with Mizuho Securities Co are planning to start a Japan-focused hedge fund on July 1, with 2 billion yen from Marubeni Corp. The pair, CEO Akira Yaku and Kentaro Ishizaki plan to grow the proposed Alithion Japan fund’s assets under management to 10 billion of yen over the next year.

The fund will target an annual return of 10% to 15% with long short positions in about 50 to 100 stocks from Japan’s top 500 companies by market value, said Ishizaki.

Nikkei Movers

SKY Perfect JSAT Holdings Inc led gainers in the Nikkei 225 Stock Average with a rise of 4.0% followed by Secom Co Ltd 2.8%, Shinsei Bank, Limited 2.2% and Japan Tobacco Inc 1.8%.

Dowa Holdings Co Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 5.0% followed by Mazda Motor Corporation 4.3%, Konica Minolta Holdings Inc 4.2%, Taiheiyo Cement Corp 4.2% and Alps Electric Co Ltd 4.1%.

Other Movers

Canon Inc fell 2.1% to 3,610.00 yen and Honda Motor Co., Ltd declined 2.5% to 2,629.00 yen.

Mizuho Securities Co., Ltd fell 4.0% to 212.00 yen after two former proprietary traders of the company said will start a long short Japan-focused hedge fund next month.

Mitsui O.S.K. Lines, Ltd, the merchant fleet, fell 1.5% to 617.00 yen.

Nintendo Co., Ltd, the maker of the Wii game machines, fell 4.7% to 24,130.00 yen.