Thai Flooding Affect Japanese Automakers; Machinery Orders Soar 11%

Nigel Thomas
12 Oct, 2011
New York City

Japanese stocks declined and machinery order in August increased more than expected in August. Toyota and Honda reported widespread production stoppages in Thailand after a third of country is devastated by the flooding.

[R]6:00 PM Tokyo – Japanese stocks declined and machinery order in August increased more than expected in August. Toyota and Honda reported widespread production stoppages in Thailand after a third of country is devastated by the flooding.[/R]

Japanese stocks closed lower and core machinery orders rose in August at the fastest pace. Shipping companies soared after freight rate surged to a 10-month high.

Japanese companies operating in Thailand announced shut down of production as much of northern and north eastern Thailand was underwater.

Canon, Toyota, Honda and Pioneer, Hoya, Aijinomoto, Nippon Meat Packers and Kubota were among the companies reporting halting production or shutting factories in Thailand.

Machinery orders in August were ahead of expectations according to the data released by the Cabinet Office today.

Gross orders increased 2.1% in August and core orders excluding the shipping and utility power machinery orders soared 11% from the previous month, the largest increase from the 12.8% increase in August of 2010. Export orders increased 32% in the month.

The Nikkei 225 Stock Average decreased 0.4% to 8,738.90 and the broader Topix index fell 0.2% to 753.44.

The yen edged lower to 76.67 from 76.62 against one dollar and rebounded from one-decade high against the euro to 105.80.

Stock Movers

The Tokyo Electric Power Company decreased 13 yen to 215 yen, Tohoku Electric Power increased 24 yen to 1,008 yen and the Kansai Electric Power fell 25 yen to 1,212 yen.

Shipping companies gained after freight rate index soared to a 10-month high.

Mitsui OSK Lines, Ltd increased 18 yen to 301 yen, Kawasaki Kisen Kaisha closed up 9 yen at 159 yen and Nippon Yusen K.K. added 10 yen to 202 yen.

Mitsubishi UFJ Financial Group fell 3 yen to 333 yen and Sumitomo Mitsui Financial Group decreased 33 yen to 2,104 yen.

Mitsubishi Corp increased 36 yen to 1,544 yen and Mitsui & Co, Ltd gained 9 yen to 1,114 yen. Marubeni Corp increased 6 yen to 419 yen.

Komatsu Ltd increased 58 yen to 1,696 yen and Hitachi Construction Machinery Co decreased 5 yen to 1,411 yen.

Dai-ichi Life fell 0.4% to 84,200 yen after Slovakia halted the plan to expand the euro zone rescue fund and is expected to approve its contribution of 10 billion euros in European Financial Stability Facility in the second vote as early as Friday.

Toyota Motor decreased 8 yen to 2,582 yen and Honda Motor Co. fell 52 yen to 2,295 yen and Nissan Motor Co Ltd increased 11 yen to 722 yen.

Toyota halted production in Thailand at three pants that account for 8% of global production after the country declared third of its provinces a “disaster area.”

Honda Motor said it was forced to shut down its factory in central Thailand that was responsible for nearly 5% of its output. The company spokesman said that 60,000 vehicles production may be lost and cut operating profit by 25 billion yen or $325 million.

Sony said it closed its camera parts making facility in Ayutthaya province till Friday where it makes outside casing for its interchangeable lens cameras.

Sony Corp increased 21 yen to 1,517 yen, Panasonic Corp rose 3 yen to 741 yen and Canon Inc closed down 10 yen to 3,530 yen. Sharp Corp decreased 22 yen to 675 yen.

Dainippon Screen Manufacturing Co. gained 3.5% to 563 yen and Tokyo Electron Ltd closed unchanged at 3,965 yen.

Olympus Corp fell 50 yen to 2,373 yen. Fanuc Ltd increased 130 yen to 11,580 yen. Kyocera increased 20 yen to 6,830 yen.

Makino Milling Co. increased 4.5% to 514 yen and Okuma Corp increased 3% to 528 yen after August machinery orders were ahead of the estimated.