Japan's Manufacturing Contraction Extends to Eleventh Month; Lasertec Reports Strong Results

Akira Ito
01 May, 2024
Tokyo

Stocks in Tokyo traded lower in thin trading and erased some of the gains in the previous two sessions as investors remained cautious amid the flood of earnings. 

Market indexes fell in a broad selloff that saw technology and financial stocks leading the decliners following sharp declines in overnight trading in New York. 

Market indexes fell nearly 1% on Wall Street after a measure of wages and benefits rose at the fastest pace in one year at 1.2%, supporting the case for the Federal Reserve to wait longer before lowering interest rates. 

The expectations of fewer and delayed U.S. rate cuts soured market sentiment in New York, overhanging Tokyo trading. 

Japan's manufacturing sector continued to contract for the eleventh month in a row, but at a slower pace in April, S&P Global reported in its final update. 

The au Jibun Japan Manufacturing PMI eased to 49.6 in April from 49.9 in the preliminary estimate and a final 48.2 in March. 

Manufacturing activities contracted at a slower pace in April as output and new orders shrank at a slower pace in the month. 

However, business sentiment was unchanged from March, driven in part by improving demand, the report noted. 

The Nikkei 225 Stock Average declined 0.2% to 38,356.20, and the Topix index dropped 0.3% to 2,733.96. 

Tokyo Electron, Advantest, Screen Holdings, and SoftBank fell between 1.5% and 3.5%. 

Toyota Motor, Honda Motor, and Nissan Motor declined between 0.4% and 1.1%. 

Financial stocks were among the leading decliners, and Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui Financial Group decreased between 0.2% and 1.4%.

Rising travel demand lifted the revenue of three Japanese railway companies, driven by the ending of the travel restrictions imposed during COVID-19 and the return of international tourists. 

East Japan Railway consolidated revenue in the year ending in March rose 13.5% to 2,730 billion yen, and West Japan Railway revenue rose 17.2% to 1,635 billion yen. 

Central Japan Railway revenue surged 22.1% to 1,710 billion yen. 

West Japan Railway increased 8% to ¥3,233.0; East Japan Railway added 3.3% to ¥2,987.50; and Central Japan Railway declined 0.1% to ¥3,614.0. 

 

Lasertec Reports Strong Quarterly Results and Announces Executive Changes

Lasertec Corporation soared 15.8% to ¥40,080.0 after the company reported higher-than-expected sales and earnings in the nine-month period ending in March. 

Consolidated nine-month revenue increased 97.9% to 157.2 billion yen from 79.4 billion yen, ordinary income soared 109.8% to 58.7 billion yen, and diluted earnings per share rose to 460.02 yen compared to 229.53 a year ago. 

The company estimated sales in the fiscal year ending in June 2024 to increase by 27.6% to 195 billion yen, ordinary income to increase by 5.2% to 67 billion yen, and diluted earnings per share to be 543.32 yen. 

The company reiterated its plans to pay a total cash dividend of 191 yen, higher than 180 yen a year ago. 

The company also promoted its chief sales officer, Tetsuya Sendoda, as the new chief executive officer and the current CEO, Osamu Okabayashi, as the new chairman.