Japan Tracks International Losses; Weak Regional Outlook

Chandrasekhar Atreya
30 Nov, 2010
New York City

Stocks in Tokyo fell sharply tracking the losses in the European markets and a rise in the dollar. Housing starts rose in October and unemployment rose for the first time in four months. Regional assessment led to the downgrade of 9 of the 11 regions.

[R]5:00 PM Tokyo – Stocks in Tokyo fell sharply tracking the losses in the European markets and a rise in the dollar. Housing starts rose in October and unemployment rose for the first time in four months. Regional assessment led to the downgrade of 9 of the 11 regions.[/R]

The Nikkei 225 Stock Average dropped 1.87% or 188.95 points to close at 9,937.04. For the month the index gained 7.98%.

Housing starts rose in October by 6.4% from a year ago to 71,390 units, for the fifth monthly increase in a row, the Infrastructure Ministry said today.

While starts of owner-occupied homes grew 10.4% to 27,842 units for the 12th monthly rise in a row, starts of rented houses dropped 9% to 25,140, for the first decline in three months. Starts of condominiums and homes for sale grew 37.1% to 17,984, the eighth monthly increase in a row.

Production of cars, trucks and buses declined 8.4% in October from a year ago, for the first such drop in nearly 12 months, after incentives for new fuel efficient vehicles was stopped in September by the government, the Japan Automobile Association said today.

The output in October was 751,620 vehicles, down from 820,861 vehicles in October 2009, the association said.

The industrial production in October fell a seasonally-adjusted 1.79% from September to 91.1, down for the fifth month in a row, according to preliminary data released by the Ministry of Economy, Trade and Industry today.

The ministry expects the production to rise 1.4% in November and 1.5% in December.

Japan Airlines Corp confirmed today that the Tokyo District Court approved the rehabilitation plan put forward for approval.

According to the plan, the carrier intends to repay its debts by the end of March 2011 with the help of the Enterprise Turnaround Initiative Corp of Japan, which will provide it 350 billion yen in capital and other loans from major banks that have ties with the carrier.

Toyota Motor Corp said it will recall 650,000 Prius cars worldwide to repair cooling pumps in an effort to rehabilitate its reputation for quality and service. The company said today the recalls aren’t a part of a recall required under law.

Of the 650,000 cars to be fixed 390,000 were in North America, 180,000 in Japan and 70,000 in Europe, according to a spokesman of the company.

Unemployment rate, seasonally adjusted, rose 5.1% in October from a month earlier, the first rise in four months, the Internal Affairs Ministry said today.

The unemployed were 3.34 million, down 10,000 from a year ago and of those without work, the number of people who were asked to leave or had to leave because the companies were closed fell by 150,000 while those who left their job of their own free will rose by 50,000.

The Japanese government downgraded 9 out of 11 regions nationwide after economic conditions deteriorated largely as industrial production declined, according to the November regional economic report of the Cabinet Office released on Monday.

These are the worst results since February 2009, when all 11 regions were downgraded in the aftermath of global financial crisis. The two regions that were not downgraded were Kyushu and Okinawa.

Shinsei Bank said today that starting Wednesday they will forego service charges for exchanges among six foreign currencies including the dollar, the euro and the Australian dollar.