Japanese Corporations Take Cautious View on Weaker Yen Benefits

Hiruki Nakamura
01 May, 2013
New York City

Market indexes in Tokyo rested after 15-year record gain of 12% in April. Power utilities are bracing for a second annual record loss and seek higher tariffs that could contribute to inflation. The latest batch of earnings outlook fell short of expectations.

[R]5:30 PM Tokyo – Market indexes in Tokyo rested after 15-year record gain of 12% in April. Power utilities are bracing for a second annual record loss and seek higher tariffs that could contribute to inflation. The latest batch of earnings outlook fell short of expectations.[/R]

Stocks in Tokyo traded lower after investors focused on the latest batch of disappointing earnings outlook.

Investors have already factored in the effect of sharp yen devaluation but corporations are still not revising the yen outlook and taking a cautious view in guiding earnings in the current year.

Separately, utilities companies are struggling to stay afloat for the second year in a row after losses at nine utilities are expected to repeat the loss of $20 billion in the previous fiscal year.

Utilities companies are bracing for tariff revision as the industry struggles to replace the cheap nuclear fuel with expensive natural gas and coal fired plants.

The yen edged up to 97.54 against one dollar.

The Nikkei 225 Stock Average dropped 61.51 or 0.4% to 13,799.35 and the broader Topix Index slid 6.76 to 1,158.37.

Stocks in Review

Alps Electric dropped 9% to 675 yen after the maker of audio electronics for automobiles estimated net income in the current fiscal year of 9.5 billion yen, lower than at least 10.5 billion estimated by analysts.

Nomura dropped 2.5% to 773 yen and Dai-Ichi Life Insurance declined 2.5%. Mitsui Fudosan gained 1.7% and Mitsubishi Estate Co rose 0.3%.

Toyota Motor Corp slipped 90 yen to 5,550 yen and Honda Motor Co. declined 55 yen to 3,820 yen and Nissan Motor Co Ltd fell 17 yen to 999 yen.

Yamaha Motor Co Ltd slid 26 yen to 1,332 yen. Mitsubishi Motors Corp slid 2 yen to 113 yen.

Nippon Steel down 2 yen to 257 yen and JFE Holdings Inc lowered 24 yen to 2,084 yen.

Tokyo Electron decreased 4% to 4,785 yen after estimating current fiscal year net income of 13 billion yen, lower than 15.5 billion yen estimated by analysts. The company also estimated operating profit of 18 billion yen.

Sony dropped 30 yen to 1,583. Canon Inc slumped 55 yen to 3,440 yen and Nikon fell 12 yen to 2,106 yen. TDK Corp declined 140 yen to 3,420 yen. NEC slid 4 yen to 249 yen.

Nintendo Co. Ltd plummeted 280 yen to 10,440 yen.

Sharp Co declined 4% after the liquid crystal display maker is expected to report a worse than 500 billion yen loss estimate in the year ended in March.

Fanuc Corp. slumped 320 yen to 14,380 yen and Komatsu Ltd declined 44 yen to 2,615 yen. Hitachi Construction Machinery Co dropped 72 yen to 2,240 yen.

Tokyo Electric Power fell 3% to 417 yen after it reported a net loss of 685.3 billion for the year ending in March, six times larger than estimated by the company.

Softbank Corp slipped 80 yen to 4,745 yen.

Japan Airlines drifted lower 4% after it estimated lower than expected operating earnings for the current fiscal year.

FamilyMart Co Ltd, the convenience chain operator fell 50 yen to 4,405 yen and Lawson slid 80 yen to 7,600 yen. Ito En Ltd lowered 27 yen to 2,318 yen.

Seven & I Holdings Co fell 10 yen to 3,730 yen. Fast Retailing Co. jumped 300 yen to 36,000 yen and J. Front Retailing Co. Ltd down 9 yen to 809 yen.

Mitsubishi UFJ Financial Group slid 9 yen to 654 yen and Sumitomo Mitsui Financial Group slipped 80 yen to 4,525 yen. Dai-Ichi Life declined 2.5% to 130,700 yen. Nomura Holdings, Inc dropped 20 yen to 773 yen.

Mitsui O.S.K. jumped 13 yen to 418 yen after it estimated a net profit of 50 billion yen in the current fiscal year on the weaker yen is expected to increase income from dollar-based contracts.