Weak Industrial Stocks in Tokyo

123jump.com Staff
04 Dec, 2007
New York City

Tokyo stocks edged lower after the weakness in the overnight trading in the U.S. Nikkei 225 index declined 0.95% or 148.8 to 15,480 and broader Topix Index 16.66 to 1,515.50. Shipping companies fell after the comments from Baltic Exchange chief executive. Mitsui Engineering fell 4%, Nippon Yusen declined 4%, Mitsui O.S.K. lost 6%.

[R]6:00AM New York, 7:00PM Tokyo - Slowing U.S. economy drags Tokyo down 0.95%. Economic and Fiscal Policy Minister Hiroko Ota says government to develop emergency policy to protect small businesses and consumers.[/R]

In Tokyo trading Nikkei 225 slipped 0.95% or 148.78 to 15,480.19, while the broader Topix Index slumped 16.66 to 1,515.50.

In the first section of the Tokyo Stock Exchange 8.4 billion shares worth 1.0 trillion yen were traded and 482 million shares valued at 9.0 billion yen changed hands in the second section.

Of the Nikkei 225 stocks 60 gained, 156 declined and, 9 were unchanged. Komatsu Limited led retreating stocks with a decline of 7.14% as manufacturing dipped, followed by Kawasaki Kisen falling 6.9%.

Other shipping lines also declined after Baltic Exchange Limited Chairman Michael Drayton said that freight charges would start to decline next year. Mitsui Engineering & Shipbuilding fell 4.86%, Nippon Yusen declined 4.16% and Mitsui O.S.K. Lines slumped 6.14%.

The U.S. Institute of Supply Management reported yesterday that the factory index dropped to the forecasted 50.8 in November from 50.9 registered in October, stoking expectations that the U.S. economic growth may be in the early stage of decline.

U.S. Federal Reserve of San Francisco President Janet Yellen said yesterday that financial conditions and consumer spending had deteriorated more than she had expected.

Japan’s Economic and Fiscal Policy Minister Hiroko Ota announced yesterday in Tokyo that the government is devising an “emergency policy” that is meant to cushion small and midsized companies from the adverse effects of rising oil prices by next week. Ota added that she is working with other ministers including with members of the ruling Liberal Democratic Party in the effort.

Rising oil prices nearing $100 per barrel have begun to hurt corporate expansion in Japan amid reports that Japan’s capital spending declined 1.2% in the third quarter.

Nikkei news reported today the Ministry of Internal Affairs and Communications and the Ministry of Finance are presently working with the ruling parties in order to divide the local enterprise tax into two components and distribute the revenues from the newly created tax according to population size. The measure is reportedly meant to close the gap in revenues among the country’s prefectural governments.

Nippon First Securities announced today on its Web site that the Financial Services Agency has suspended operations at the company for six months from today until June 3 for having insufficient capital and also trading improprieties. However, the company would be allowed to handle some settlement transactions during this period.

GS Yuasa Corp led gainers in Nikkei 225 index with a rise of 5.93%, followed by losses of 4.21% in Dentsu Incorporated, 3.74% in Japan Tobacco, 3.70% in Osaka Gas Company Limited, and 3.70% in Tokyo Gas Company Limited.

Komatsu Limited led the decliners in Nikkei 225 index with a fall of 7.14%, followed by losses of 6.99% in Kawasaki Kisen, of 6.61% in Sumco Corporation, of Mitsui O.S.K lines 6.14%, and 5.81% in Tokai Carbon Company.

Commodity related stocks also slipped after the price of commodities declined. Copper prices tumbled 2.6%, nickel slipped 1.1% and zinc declined 4.1%. Nippon Mining House dropped 5.20%, Mitsui & Company climbed down 5.25%.

Yahoo Japan Corp announced in a statement today a business tie-up with the U.S. online market place Ebay through which a Japanese language auction Web site would be set up this year. According to Yahoo Japan Corp spokesman Kiminihiko Sato the company’s members would be able to bid for Ebay products on its Web site by March, while Yahoo Japan products would be posted on Ebay’s site next year.

Bloomberg news reported today that retailer Aeon might start soliciting an additional 18% of voting rights to veto the proposed merger between pharmaceutical company CFS Corp, in which it has 15% equity, and Ain Pharmaciez Incorporated in January.

Aeon contends that CFS should ally with its affiliates Welcia Kanto Company on drug store operations and with Maxvalu on the supermarket business.

Airbus SAS Executive Vice President Kiran Rao said in Tokyo last week the plans to order more than 5% of parts and materials of the new A350 from Japanese suppliers as it seeks to rival Boeing. Rao said the company is in talks with Teijin Limited, Toray Industries and other potential suppliers, adding that it might sign contracts with 22 Japanese suppliers. Airbus hopes that the making A350 parts in Japan might help it win orders in the local market.