Japan Stocks Gained on China Orders

Darlington Musarurwa
01 Jun, 2009
New York City

Stocks in Japan and in Asia closed higher after manufacturing index in China increased. The prospect of higher exports also lifted stocks of steelmakers, shippers and metal processing companies.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan and in Asia closed higher after manufacturing index in China increased. The prospect of higher exports also lifted stocks of steelmakers, shippers and metal processing companies.[/R]

Japan’s market averages gained after economic report in China suggested better manufacturing climate and rising export orders.

China’s Purchasing Managers Index, which gauges manufacturing activity, gained to 53.1, indicating expansion. In addition, a reading of foreign orders jumped 50.1% in the review period from 49.1% recorded in April.

Shipping lines and resources stocks gained after crude oil price closed up 1.9% to $66.30 a barrel and gold prices added 1.7% to $980.30 an ounce.

Market gains were however pared by news the unemployment rates gained to a
seasonally adjusted 5% in April.

In Tokyo trading, Nikkei 225 index gained 1.6% or 155.25 to 9,677.75, and the broader Topix Index increased 1.6% or 14.61 to 912.52.

In the first section of the Tokyo Stock Exchange 25 billion yen stocks worth 1.7 trillion yen were traded and in the second section 361 million shares valued at 4.8 billion yen exchanged hands.

Of the Nikkei 225 index stocks, 188 gained, 32 dropped, and 5 were unchanged. Mitsui Mining & Smelting led advancers in the index shares with a rise of 10.3% after commodity stocks rose on expectations the global economy is rebounding.

Nomura Real Estate Holdings declined 2.1% to 1,665 yen after it said in a filing with the Tokyo Stock Exchange that it plans to raise as much as 64.1 billion yen through a sale of 40 million shares. The company will place 36 million shares to investors and place 5.4 million shares with Nomura Securities Company.

Gainers & Losers

A rise in commodities and energy prices lifted stocks of trading and metal processing companies.

Sumitomo Metal Mining Co. jumped 7% to 1,439 yen and Mitsui Mining & Smelting Co. surged 10% to 247 yen. Toho Zinc Co added 8.7% to 1,411 yen and Kobe Steel Ltd increased 6.7% to 176 yen.

Marubeni Corp increased 7.2% 462 yen. Mitsubishi Corp increased 5.6% to 1,899 yen.

Shipping companies increased in trading. Mitsui OSK Lines increased 6.4% 719 yen and Kawasaki Kisen surged 7.4% to 463 yen.

Steelmakers gained as well. Nippon Steel increased 2.5% to 373 yen, JFE Holdings added 4.4% to 3,320 yen and Nisshin Steel Company surged 15% to 247 yen after Nomura Holdings rated the company ‘buy.’

Japan Wages Fall 2.5%, Unemployment Rises to 5%

Japan’s Ministry of Health, Labour and Welfare reported today that the country’s total cash earnings fell 2.5% to 272,453 yen in April, while contractual cash earnings dropped 2.4% to 265,395 yen and scheduled earnings declined 1% to 248,736 yen.

Non-scheduled cash earnings tumbled 18.8% to 16,649 yen in the period. Special cash earnings also declined 6% to 7,068 yen.

The survey reported that total hours worked decreased 2.7% to 149.8 hours, as scheduled hours worked dipped 1.3% to 140.6 hours and non-scheduled hours advanced 19.7% to 9.2 hours.

Regular employees advanced 0.4% to 44.1 million, full-time employees fell 0.7% to 32.3 million and part-time employees rose 3.4% to 11.8 million.

Separately, Asahi News noted that a government’s latest labor survey indicated that the unemployment rate in Japan rose to a seasonally adjusted 5% in April, rising above the 5% threshold for the first time in five years.

The jobless rate increased 0.9 percentage point in the past three months and the ratio of full-time positions available to job applicants dipped to 0.27.

New job openings in the manufacturing sector declined by over 50% in the month from a year earlier and dropped 40% in the information and telecommunication industry.

Job openings in the transport industry contracted more than 30%.

China’s PMI Rises to 53.1% in May

China’s Federation of Logistics and Purchasing reported today that the country’s Purchasing Managers’ Index, which measures activity in the country’s manufacturing sector, jumped 53.1% in May, down 0.4 percentage points from a month earlier.

The Purchasing Managers'' Index (PMI) of China''s manufacturing sector stood at 53.1 percent in May, the China Federation of Logistics and Purchasing (CFLP) said Monday.

A reading of above 50 indicates expansion, while one below 50 shows contraction.

Yen Falls

The yen declined 1.9% to 94.58 against the dollar from 94.55 on Friday’s closing.

Nikkei 200 Average Movers

Sumco Corp led the decliners in the Nikkei 225 index of 5.3% followed by losses in Clarion Co. Ltd. of 2.1%, in Secom Co Ltd. of 2.0%, in Yahoo! Japan Corp of 1.8% and in T&D Holdings, Inc of 1.8%.

Mitsui Mining & Smelting Co Ltd. led gainers in the Nikkei 225 index with a rise of 10.2% followed by gains in Konica Minolta Holdings Inc of 9.7%, in Toho Co Ltd, of 8.7% and Toho Zinc Co. Ltd of 8.5%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 155.25 or 1.63% to 9,677.75, Hang Seng index in Hong Kong increased 717.59 or 3.95% closed to 18,888.59, CSI 300 index in China higher 98.63 or 3.57% closed to 2,858.34. ASX 200 index in Australia increased 76.30 or 2.00% closed to 3,894.40. The KL Composite index in Malaysia higher 17.69 or 1.69% closed to 1,061.80.

The Kospi Index in South Korea increased 19.21 or 1.38% to close at 1,415.10. SET index in Thailand closed higher 19.57 or 3.49% to 579.98 and JSE Index in Indonesia increased 81.75 or 4.26% closed to 1,998.58. The Sensex index in India increased 215.38 or 1.47% closed to 14,840.63.