Japan Exports Fall Slows; Fujitsu Sales Outlook

Mukesh Buch
23 Jul, 2009
New York City

Exports in June declined at a slower pace in Japan. Exports to China attracted demand for electronic and auto component makers. Yen weakened on the report. KDDI declines on a broker downgrade. Nitto Denko June sale decline slowed. Fujitsu Ltd gained on fiscal 2011 target. Japan Tobacco falls.

[R]6:00 PM Tokyo, 4:00 AM New York – Exports in June declined at a slower pace in Japan. Exports to China attracted demand for electronic and auto component makers. Yen weakened on the report. KDDI declines on a broker downgrade. Nitto Denko June sale decline slowed. Fujitsu Ltd gained on fiscal 2011 target.[/R]

International trade data for the month of June suggested that exports decline are easing but remain sharply lower than a year ago. Though trade is weak between Japan and U.S., Europe and China, at least the monthly declines are slowing but have still not stabilized.

International trade in June improved for the first time in the last two years as exports declined less. In the month, exports fell 35.7% to 4.5 trillion yen ($50 billion) and imports declined 41.9% to 4.1 trillion yen ($46 billion).

Trade surplus in the month surged 388% from a year ago month to 508 billion yen ($5.4 billion) according to the latest data released by the Ministry of Finance.

Exports to China declined 23% and to Western Europe and U.S. fell more than 37%. However, the decline in exports to China has slowed considerably from the peak decline of more than 45% in February and March.

Exports in the January to June period declined 42.7% and imports plunged 38.6% and trade surplus dropped 99.7%.

Gainers & Losers

Of the stocks in Nikkei 225 Stock Average, 124 increased, 86 decreased and 15 were unchanged.

With the release of international data, stocks linked to exports rebounded.

Asahi Glass increased 0.8% to 794 yen, Cannon added 0.3% to 3,160 yen, Citizen Holdings increased 1.9% to 475 yen and Fuji Film Holding added 1.9%.

Megachips Corp surged 4.1% to 2,395 yen on the recommendation from Nomura. The smart grid component provider is the likely beneficiary as electric grid operators around the world upgrade the power transmission networks.

KDDI Corp decreased 1.3% to 512,000 yen after Goldman Sachs lowered the rating on the company.

Fujitsu Ltd increased 3.4% to 543 yen after it guided sales in the fiscal 2011 of 5 trillion yen and net income of 130 billion yen. The company targeted operating income in fiscal 2009 of 80 billion yen, in 2010 of 200 billion yen and in 2011 of 250 billion yen.

Automakers traded higher on the hopes that yen will decline and the current trend in exports will continue in the rest of the year. Yen decreased to 94.45 to a dollar.

Honda Motor Company increased 1.1% to 2,620 yen, Toyota Motor added 1.7% to 3,660 yen and Nissan Motor edged up 0.8% to 603 yen. Hino Motors Ltd surged 3.9% to 292 yen. Bridgestone Corp increased 2.5% to 1,613 yen.

The drop in decline in exports to China and Nitto Denko reporting lesser decline in sales in June helped electronic components stocks.

Nitto Denko Corp increased 1.6% to 2,930 yen after the optical film maker for LCD panels said sales declined slower in June to 13% after falling 21% in May. The sales decline began in May 2008 and accelerated to 51% in January of this year.

On the news, Tocalo Company Ltd, thermal spraying and surface modification technology provider increased 15.3% to 1,507 yen and Ibiden increased 1.8% to 2,810 yen. Ibiden is active in making diesel filters that trap soot as diesel emission standards around the world are tightened.

Fuji Electric surged 8.1% to 160 yen and Furukawa Electric added 5.9% to 469 yen.

Japan Tobacco declined 4.5% to 259,900 yen on no news. In the U.S. Altria Group, the maker of Philip Morris cigarettes reported a slight decline in market share and said that cigarettes sale volume are on the decline.

Nikkei 200 Average Movers

Japan Tobacco Inc led the decliners in the Nikkei 225 index of 4.5% followed by losses in T&D Holdings, Inc of 2.6%, in Obayashi Corp of 2.6%, in Sompo Japan Insurance Inc of 2.4% and in East Japan Railway Co of 2.3%.

Meidensha Corp led gainers in the Nikkei 225 index with a rise of 10.4% followed by gains in Fuji Electric Holdings Co Ltd of 8.1%, in CSK Holdings Corporation of 7.4% and Sumco Corp of 6.8%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 69.78 or 0.72% to 9,792.94, Hang Seng index in Hong Kong increased 569.53 or 2.96% to 19,817.70 and CSI 300 index in China higher 45.04 or 1.25% to 3,651.97. ASX 200 index in Australia decreased 4.40 or 0.11% to 4,064.10. The FTSE Bursa KL Composite index in Malaysia closed higher 3.45 or 0.30% to 1,152.15.

The Kospi Index in South Korea increased 2.45 or 0.16% to close at 1,496.49. SET index in Thailand closed higher 13.97 or 2.34% to 612.19 and JSE Index in Indonesia increased 35.10 or 1.65% to 2,160.72. The Sensex index in India increased 387.92 or 2.61% to 15,231.04.