Nikkei Losses Total 6.2%; Machinery Orders Up 4.8%

Nigel Thomas
11 Apr, 2012
New York City

The benchmark Nikkei index in Tokyo extended losses for the seventh day totalling 6.2%. Machinery orders jumped in February and the yen strengthened. Bank lending rose in March as reconstruction drive loans demand.

[R]8:00 PM Tokyo – The benchmark Nikkei index in Tokyo extended losses for the seventh day totalling 6.2%. Machinery orders jumped in February and the yen strengthened. Bank lending rose in March as reconstruction drive loans demand.[/R]

Stocks in Japan drifted lower and extended losses for the seventh day in a row as investors wake up to the rising bond yields in Europe and Japanese electronics makers suffer losses and retreat in face of competition from Korea.

The benchmark Nikkei index declined 6.2% in last seven trading sessions rivaling losses of 9.1% in six days in July 2009. The latest decline comes after the Nikkei surged more than 19% in the first quarter and the index is still up 11.9% in the year.

The Nikkei 225 Stock Average declined 79.28 to 9,458.74 and the broader Topix index decreased 7.59 to 805.84.

In trading, 2.1 billion shares changed hands on the main board on the Tokyo Stock Exchange, higher than 1.93 billion shares on Tuesday.

The yen strengthened to 80.89 against one dollar and traded as high as 105.45 against one euro. The automakers and electronics exporters declined sharply on the continued strength in the yen.

Core machinery orders increased 4.8% in February from a year ago according to the latest data released by the government. The surprise gain in the orders which are considered a leading indicator of capital spending failed to lift trading sentiment.

Separately Bank of Japan said lending rose 0.8% in March from a year ago after rising 0.6% in February and the officials cited the rising loan demands on reconstruction after last year’s earthquake.

Stock Movers

Toyota Motor closed down 40 yen to 3,320 yen and Honda Motor Co. declined 53 yen to 2,899 yen and Nissan Motor Co Ltd rose 1 yen to 833 yen.

Kansai Electric Power Company, Inc dropped 41 to 1310 yen after Prime Minister held talks last evening to restart two nuclear reactors owned by the company that passed stress tests. Tokyo Electric Power fell 3 yen to 207 yen.

Sony Corp declined 71 yen to 1,515 yen and the struggling electronics maker estimated a loss of 520 billion yen or $6.4 billion compared to its previous estimate of 220 billion yen. The company retained its operating loss forecast of 95 billion yen. The annual results are scheduled to be released on May 21.

The loss forecast is twice the previous estimate and is in the fourth year in a row as the company struggles to stem losses in its TV unit and battle competition from Apple and Korean rivals. The company also plans to eliminate 10,000 jobs or 6% of its workforce to aggressively cut costs.

Sony stock has lost nearly half its value in one year of trading.

Panasonic Corp closed down 15 yen at 656 yen and Canon Inc dropped 15 yen to 3,735 yen. Nintendo Co. Ltd tumbled 120 yen to 11,920 yen.

Sharp declined 17 yen to 513 yen after a Nikkei newspaper report suggested that the company’s net loss may soar to 390 billion yen or $4.78 billion.

Olympus Corp closed down 4 yen to 1,305 yen, Nikon surged 27 yen to 2,403 yen and Fanuc Ltd soared 260 yen to 14,220 yen. Hitachi Ltd fell 3 yen to 515 yen.

Komatsu Ltd slipped 23 yen to 2,294 yen, Hitachi Construction Machinery Co decreased 6 yen to 1,730 yen and Toyo Engineering Corp closed up 2 yen to 363 yen.

Mitsui O.S.K. Lines, Ltd fell 8 yen to 331 yen, Kawasaki Kisen Kaisha, Ltd slumped 7 yen to 174 yen and Nippon Yusen K.K. dropped 6 yen to 242 yen.

Fast Retailing Co. declined 280 yen to 17,210 yen and J. Front Retailing Co. Ltd closed down 9 yen to 418 yen.

Mitsubishi UFJ Financial Group fell 4 yen to 390 yen and Sumitomo Mitsui Financial Group decreased 10 yen to 2,603 yen. Nomura Holdings, Inc slipped 10 yen to 342 yen.

Tokyo Tatemono Co., Ltd closed down 3 yen to 301 yen and Mitsui Fudosan dropped 24 yen to 1,458 yen and Sumitomo Realty & Development Co. jumped 27 yen to 1,811 yen.

Nippon Steel fell 5 yen to 201 yen and JFE Holdings Inc tumbled 2.6% or 43 yen to 1,578 yen.