Nikkei Gains; Machine Tool Orders Surge 170%

Chandrasekhar Atreya
19 Jan, 2011
New York City

The Nikkei closed higher for the third day in a row led by exporters. Machine tool exports surges 170% as China leads the demand. Mitsubishi Heavy Industry secures an order worth more than 10 billion yen for supply of gas power plant to a U.S electric utility.

[R]5:00 PM Tokyo, Japan – The Nikkei closed higher for the third day in a row led by exporters. Machine tool exports surges 170% as China leads the demand. Mitsubishi Heavy Industry secures an order worth more than 10 billion yen for supply of gas power plant to a U.S electric utility.[/R]

Tokyo stocks gained on better-than-expected earnings at IBM and Apple Inc which boosted investor confidence.

The Nikkei 225 Stock Average added 0.36% or 38.12 to close at 10,557.10. The broader Topix gained 0.58% to 936.87. The yen closed at 82.04 yen to a dollar and 110.42 yen to a euro in Tokyo today.

The number of new condominiums for sale in Tokyo rose 40.8% in December from a year ago to 7,388, according to the Real Estate Economic Institute Co report.

The report released today showed that new condos for sale dropped 4.7% in the Kinki region, which includes Osaka, to 1,682 with purchase contracts signed for 70.7%, down 3 percentage points.

The national policy minister said today that the government will not increase the consumption tax until after the general elections, which must take place no later than 2013. The government will however draft a bill for the hike by March of 2012, as required by a provision in a reform law of taxes promulgated in 2009.

“The economy needs to be watched closely before implementation of a consumption tax hike,” Koichiro Gemba said at a press conference while addressing the Foreign Correspondents Club of Japan.

Kirin Brewery Co said today it expects sales to drop 2.4% in 2011 from a year ago. The company said it expects to sell 165.9 million cases of beer and beer-like beverages.

Mitsubishi Chemicals Corp plans to increase its output of high-grade pitch used for needle coke and carbon fibers. This unit of Mitsubishi Chemical Holdings Corp produces some 240,000 tons of pitch per annum, but it is a variable mix of grades, with only the higher grades usable for carbon fibers and needle coke.

To increase the output of high-grade pitch by about 20%, the company plans to invest over 1 billion yen to install a furnace to heat the pitch to around 1,100 degree centigrade to yield the higher percentage. The furnace will be installed at its Sakaide Plant in Kagawa Prefecture by 2013.

Japan’s machine tool industry is growing more dependent on Asian demand, especially Chinese demand, according to preliminary 2010 data released Tuesday by the Japan Machine Tool Builders’ Association.

Machine tool exports surged 170% to 671.1 billion yen in 2010, making up 68.6% of all orders. Asia accounted for 60.9%, up 54.7% from 2009, with China accounting 37.7% of the orders, up from 34.5%. Exports to China shot up 190% to 253 billion yen, beating the 141.8 billion yen to North America and 106.1 billion yen to Europe.

Mitsubishi Heavy Industries Ltd said Tuesday it has received an order worth more than 10 billion yen for natural gas power plant from a subsidiary of U.S. based Dominion Resources Inc.

The order is for a gas turbine combined-cycle power plant from Virginia Electric and Power Co. The technology has gas turbines generating electricity, with the resulting waste heat used to produce steam that drives a steam turbine to generate even more power.

Stock Movers

Hitachi Ltd, the biggest contributor to the broader Topix, rose 3.79% to 465 yen, while Elpida added 5.7% to close at 1,162 yen.

Panasonic Corp rose 0.6% to 1,167 yen.

Toray increased 4.71% to 556 yen and Teijin Ltd, gained 6.6% to 421 yen after positive comments from a broker.

Nissan Motor Co added 0.59% to 849 yen.

Mitsubishi Heavy added 0.9% to 335 yen after securing an order for a natural gas power plant from a U.S. electric utility.