Sony, Toyota Delay Launches on Thai Floods; Nikkei Down 1%

Nigel Thomas
20 Oct, 2011
New York City

Stocks in Japan decreased after a weakness in international markets as the euro zone turmoil appear to continue and European leaders are at odds in how to increase the size of the rescue fund. Japanese regulators may open Olympus purchase inquiry and Toyota and Sony delay production on Thai floods.

[R]6:00 PM Tokyo – Stocks in Japan decreased after a weakness in international markets and commodities declined as the euro zone turmoil appear to continue. European leaders remain at odds in how to increase the size of the rescue fund. Olympus extended losses as Japanese regulators may open an inquiry and Toyota and Sony delay production on Thai floods.[/R]

Stocks in Japan declined following the market losses in Asian trading and ongoing worries in the euro zone.

Investors are increasingly factoring that the weekend summit of European leaders may fail to resolve the European debt crisis and more banks in the region are expected to face higher funding costs and lower ratings.

The Nikkei 225 Stock Average decreased 1% or 90.40 to 8,682.15 and the broader Topix index decreased 0.7% to 746.02.

The yen edged higher to 77.86 from 77.69 against one dollar and fell to 104.75 yen against one euro.

Ministry of finance noted that foreign investors were net buyers of Japanese stocks for the first time last week after selling stocks for twelve weeks in a row.

In trading on the main section of the Tokyo Stock Exchange, 1.30 billion shares changed hands and rebounded from the low for the last eleven months. Olympus led the most active list on the main section of the Tokyo Stock Exchange.

Thailand flood waters are rising around Bangkok and authorities may be forced to open canal drains to let water run to ocean.

The main international airport, Suvarnabhumi Airport is protected with a barrier that is as high as 3.5 meters.

Sony and Toyota and other companies halted production and delayed the release of Labor Ministry said that work at 14,254 factories and businesses have been disrupted in 20 of the 77 provinces and 664,567 workers.

Nearly nine million people are affected by floods and 27 o the Thailand’s 77 provinces are already underwater.

Stock Movers

Automobile Manufacturers Association Chairman Toshiyuki Shiga commented to reporters that 6,000 fewer cars per day are assembled because of Thai floods.

Toyota Motor decreased 25 yen to 2,555 yen and Honda Motor Co. fell 70 yen to 2,304 yen and Nissan Motor Co Ltd decreased 12 yen to 697 yen.

Mazda Motor Corp declined 2 yen to 156 yen after the automaker said it will suspend its production in Thailand till October 22.

Sony Corp said it will postpone the launch of new cameras, headphones and lens accessories as the company’s operations are shut at several location in Thailand.

Sony Corp decreased 25 yen to 1,544 yen, Panasonic Corp fell 8 yen to 753 yen and Canon Inc decreased 15 yen to 3,460 yen.

Olympus continued to lead the most actively traded stock list in Tokyo and ex chief executive Michael C. Wooford approached Japanese regulators and highlighted the improper payments related to an acquisition.

Investors were also surprised that Woodford did not approach Japanese regulators and the Tokyo Stock Exchange before reaching out to UK regulators.

Olympus Corp dropped 5% or 68 yen to 1,321 yen, the low last seen in March 2009. Fanuc Ltd decreased 2700 yen to 11,890 yen. Kyocera closed declined 2.2% to 6,940 yen.

DeNA Co. rose 44 yen to 3,180 yen after the company is expected to pay 10 billion yen to acquire Yokohama BayStars professional baseball team. The news was first reported by the business daily Nikkei.

The Tokyo Electric Power Company increased 77 yen to 292 yen, Tohoku Electric Power increased 27 yen to 980 yen and the Kansai Electric Power added 50 yen to 1,216 yen.

Mitsui OSK Lines, Ltd decreased 8 yen to 299 yen, Kawasaki Kisen Kaisha, Ltd closed down 4 yen at 149 yen and Nippon Yusen K.K. closed flat at 204 yen.

Mitsubishi UFJ Financial Group fell 1 yen to 337 yen and Sumitomo Mitsui Financial Group decreased 9 yen to 2,146 yen.

Mitsubishi Corp decreased 4 yen to 1,516 yen and Mitsui & Co, Ltd decreased 8 yen to 1,093 yen. Marubeni Corp decreased 8 yen to 416 yen.

Komatsu Ltd decreased 62 yen to 1,700 yen and Hitachi Construction Machinery Co decreased 58 yen to 1,326 yen.

Dai-ichi Life fell 2.2% to 82,000 yen and the yield spreads on French bonds rose to a record high 119 basis points to the German bunds and five largest Spanish banks were downgraded by Moody’s.

Dai-ichi holds at $4 billion of peripheral euro zone bonds.