Factory Index Declines, Tokyo Stocks Down

123jump.com Staff
28 Feb, 2008
New York City

January factory index fell 2% from December but for the year the index rose 2.5%. The decline in manuafacturing prompted worries of economic slowdwn. Nikkei 225 index declined 0.75% or 105.79 to 13,925.51. Aeon Corp reported its net income for the year of 44 billion yen, lower than its estimate of 60 billion yen.

[R]5:00AM New York, 7:00PM Tokyo – Production index in January declined 2% from December but rose 2.5% from a year ago.[/R]

Stocks in Japan traded in negative territory after a government report showed that factory production unexpectedly slumped 2% from December in January. Automakers and electronic equipment makers also traded lower as the yen gained against the dollar but Japanese bonds gained.

Market Sentiment

In Tokyo trading Nikkei 225 declined 0.75% or 105.79 to 13,925.51, and the broader Topix Index dropped 0.8% or 11.42 to 1,353.10.

In the first section of the Tokyo Stock Exchange 8.9 billion shares worth 963 billion yen were traded and in the second section 224 million shares valued at 3.3 billion yen changed hands.

Of the Nikkei 225 stocks 69 gained, 150 declined, and 6 were unchanged. Toho Zinc led advancers in the Nikkei 225 index shares with a rise of 8.80% followed by Konami Corp increasing 4.87%.

Industrial Production slips 2%

The Ministry of Economy, Trade and Industry reported today industrial production fell 2% at 109.8 in January from the previous month, falling for the first time in two months.

Industries that mainly contributed to the drop include: electronic parts and devices, transport equipment and general machinery correspondingly, while commodities that impacted on the fall were large passenger cars, metal oxide semiconductor IC (Memory), and digital camera’s respectively.

For the year, industry production increased 2.5% from the previous year.

Industrial Production Forecast

METI also reported in its Survey of Production Forecast in Manufacturing released today that industrial production is projected to decline 2.9% in February and pick up 2.8% in March.

The March increase in production is expected to be driven by electronic parts and devices and iron & steel in that order.

Shipments Fall

According to METI’s report, shipments in January dropped 0.9% from the previous month at 115.8, and increased 4% from a year earlier.

Electronic parts and devices, transport equipment and general machinery respectively dragged January shipments down.

January Inventory Drops

Japan’s inventory fell 1.3% in January from December for the second straight month and increased 0.5% from the previous year as industries such as transport equipment, electrical machinery and iron & steel fell in that order.

Gainers & Losers

Toho Zinc led gainers in the Nikkei 225 index shares with a rise of 8.80% followed by rises in Konami Corp. of 4.87%, in Furukawa Co. Ltd of 4.02%, in Sanyo Electric of 3.69%, and in Mitsubishi UFJ Nicos of 3.62%.

Tokyo Electron led decliners in the Nikkei 225 index shares with a drop of 4.56% followed by losses in Isuzu Motors of 4.21%, in Mazda Motor Corp. of 3.96%, in Millea Holdings of 3.62%, and in Yokohama Rubber of 3.55%.

Exporters declined as the yen gained against a retreating dollar. Canon shed 1.40% and Komatsu slipped 1.74%.

Fair Trade Commission raids Sharp, Hitachi

Kyodo news reported today that the Free Trade Commission raided Sharp and Hitachi Limited on allegations that that they “colluded to buttress the prices of liquid crystal displays” that are used in Nintendo’s video game handsets.

The two companies are being investigated for violation the Antimonopoly Law.

Sumitomo Mitsui to merge four nonbank firms

The Nikkei news reported today Sumitomo Mitsui Financial Group Inc. will integrate four group nonbank firms- Sumitomo Mitsui Card Co., OMC Card Inc and major consumer credit companies Central Finance Co and Quoq Inc. The industry has consolidated rapidly after the new law lowers the limit on interest rate charged to consumers.