Nikkei Drops 1.1%; Honda Output Up 25%

Chandrasekhar Atreya
28 Sep, 2010
New York City

Stocks in Japan dropped after most companies traded ex-dividend today. Japan said it will seek compensation from China for damage to patrol vehicles in the collision case. Toyota starts giving cash incentives for minivan purchases.

[R]5:00 PM Tokyo, Japan – Stocks in Japan dropped after most companies traded ex-dividend today. Japan said it will seek compensation from China for damage to patrol vehicles in the collision case. Toyota starts giving cash incentives for minivan purchases.[/R]

Japanese stocks fell after most companies in the Topix Index traded ex-dividend today and speculation that consumer lender Takefuji Corp would file for bankruptcy today.

The Nikkei 225 Stock Average fell 1.12% or 107.38 to close at 9,495.76. The broader Topix declined 0.8% to close at 842.65.

Of the 225 stocks in the Nikkei index, 48 gained, 159 decreased and 18 were unchanged.

Honda Motor Co said Tuesday its domestic production rose 24.8% in August from a year ago to 68,065 units, up for the eighth month in a row and exports surged 55.9% to 27,573 units, increasing for the sixth month in a row.

Domestic sales expanded for the fourteenth month in a row and climbed 59.6% to 65,009 units while overseas production grew 14.7% to 220,019 vehicles, rising for the tenth month in a row.

After the government subsidy program came to its end, Toyota Motor Corp started offering cash back to customers as incentive for minivans with factory-installed navigation systems.

The consumers will receive a 30,000 yen cash rebate from the automaker while purchasing the navigation systems with Toyota Minivan brands Voxy, the Alphard, and the Noah.

Japanese Finance Minister said Tuesday that the government should not rely on debt issuance to finance a planned extra budget. On Monday, Prime Minister Naoto Kan instructed his cabinet to begin drafting a supplementary budget designed to keep the nation’s faltering economy from falling into recession.

“It is not desirable to issue new government bonds,” Yoshihiko Noda said at a news conference following a regular cabinet meeting.

Sekisui House Ltd said Monday that it is entering the real estate market in the U.S. As a first step, the company will partner local firm Newland Real Estate Group LLC to develop residential land for 1,200 homes on 199 hectares of land purchased in Houston. The developed property is expected to go on sale in about three years.

The Cabinet Office’s index of export volume dropped 5.4% to 100 in August from a year ago, mainly because of fall in shipments to the U.S. and Asia.

Escalating the diplomatic tiff with China, a top government official said Monday that Japan will ask Beijing for the damage incurred by the Japanese patrol boats from a collision with a Chinese fishing trawler in disputed waters.

The government made this announcement after a bruising weekend following the Friday release of the Chinese captain. Rather than calming the situation, the release seemed to have inflamed passions in Japan, where the politicians and the media attacked the premier for bowing to Chinese pressure.

The six major prepaid e-money services in Japan handled a total of 180 million transactions in August, rising 39% from a year earlier, for its eighth consecutive monthly rise of over 30% growth.

East Japan Railway Co’s Suica was used for 40.63 million transactions, a jump of 40.7% and Pasmo, which can be used for paying fares on bus and rail in the Kanto region, settled 17.07 million transactions, up 37.7%.

Sales at restaurants rose 1.6% in August from a year ago, due to scorching heat, marking a second month of increase in a row, the Japan Foodservice Association reported Monday.

Idemitsu Kosan Co is expanding its fuel oil export capacity by adding export-related facilities at its Tokuyama refinery, the only one of the country’s four refineries not currently set up for exports.

The project will give Tokuyama refinery an annual export capacity of 450,000 kiloliters and will start late September to coincide with a temporary halt to operations at the site.

Reikin or gift money, a non-refundable fee on top of a deposit and any broker fee that helped boost landlord’s income in Japan since at least 1897, is the latest victim of a slump in Tokyo’s rental market. Rents in the city’s five central wards fell to an average 4,165 yen per square meter in June, the lowest since the Japan Real Estate Institute started tracking rents in 1998.

Gainers & Losers

Nippon Light Metals led gainers in the Nikkei with a rally of 1.97% 155 yen followed by Okuma Corp 1.88% to 489 yen, Shinsei Bank Ltd 1.75% to 58 yen, Mitsubishi Materials 1.69% to 241 yen, J Front Retailing 1.50% 406 yen and Fanuc Ltd 1.49% to 10,890 yen.

Credit Saison Co led decliners in the index with a drop of 4.4% to 1,152 yen followed by Nippon Electric Glass Ltd 4.38% to 1,156 yen, TDK Corp 4.16% to 4,725 yen, Eisai Co Ltd 3.8% to 2,987 yen, SKY Perfect JSAT Holdings Inc 3.8% to 28,320 yen and Nomura Holdings Ltd 3.32% to 408 yen.