Japanese Machinery Orders Flat, Mitsubishi Motors to Raise $2 Billion

Hiruki Nakamura
12 Sep, 2013
New York City

Stocks in Tokyo fell for the second day in a row and the yen hovered near a 6-week low. Core machinery orders were unchanged in July. Mitsubishi Motors plans to raise as much as $2 billion to repurchase preferred shares held by affiliates. Sharp is expected to raise $1.5 billion.

[R]4:30 PM Tokyo – Stocks in Tokyo fell for the second day in a row and the yen hovered near a 6-week low. Core machinery orders were unchanged in July. Mitsubishi Motors plans to raise as much as $2 billion to repurchase preferred shares held by affiliates. Sharp plunged 6% after the company is expected to raise $1.5 billion.[/R]

Stocks in Tokyo traded lower for the second day in a row as investors took a wait-and-see approach ahead of sales tax and financial reform announcement later in the month.

The Nikkei 225 Stock Average decreased 0.3% to 14,387.21 and the Topix index fell 0.4% to 1,184.36.

The broader Topix index jumped 7% in the month so far and has soared 38% in the year ahead of financial and monetary reforms and the weaker yen.

The yen edged higher 0.6% to 99.27 after dropping as low as 100.61 against one dollar, the weakest in six weeks.

Prime Minster Shinzo Abe is expected to announce sales tax increase to 8% as early as next week and also offer a 5 trillion yen stimulus package along with structural labor reform and pension fund investing changes.

Core machinery orders excluding volatile ship machineries and power generating equipment were unchanged in July from the previous month, the Cabinet Office said today in Tokyo.

The orders are an indication of future capital spending and businesses are largely welcoming weaker yen and increasing capital spending at domestic businesses.

Stocks in Review

Mitsubishi Motors plunged 8% after the automaker is preparing to raise as much as 200 billion yen or $2 billion to buy back preferred shares held my other affiliate companies.

The automaker was bailed out at the time of 2008 global financial crisis by other affiliate companies Mitsubishi Heavy Industries Ltd, Mitsubishi Corp and Mitsubishi UFJ Financial Group Inc.

Sharp Corp declined 6% after the company was expected to announce a public offering to raise as much as 150 billion yen.

Electronic parts makers closed lower after Apple’s plan to release two new iPhone devices at lower prices failed to excite critics.

Murata Manufacturing Co decreased 3% to 6,824 yen and Daikin Industries Ltd dropped 1.5% to 5,193 yen.