Nikkei Declines, Machinery Orders Rise

123jump.com Staff
10 Jun, 2008
New York City

Stocks in Japan fell despite a government report that showed that machinery orders rose in April as worries on inflation and rising interest rates took their toll on the market. Nikkei 225 fell 1.13% or 160.21 at 14,021.17, and the broader Topix Index dropped 1% or 14.34 at 1,383.20.

[R]5:00AM New York, 7:00PM Tokyo - Japan’s machinery orders rise 4.5% in April.[/R]

Stocks in Japan fell despite a government report that showed that machinery orders rose in April as worries on inflation and rising interest rates took their toll on the market.

Market sentiment

In Tokyo trading Nikkei 225 fell 1.13% or 160.21 at 14,021.17, and the broader Topix Index dropped 1% or14.34 at 1,383.20.

In the first section of the Tokyo Stock Exchange 8.7 billion shares worth 952 billion yen were traded and in the second section 225 million shares valued at 4.3 billion yen changed hands.

Of the Nikkei 225 stocks 39 gained, 171 declined and 15 were unchanged. Clarion Co. Ltd led advancers in the index shares with a rise of 6.03% followed by an increase in Dowa Holdings Co. of 2.89%.

Machinery orders gained 4.5% in April

The Cabinet Office reported today that Japan’s total value of machinery orders received by 280 manufacturers operating in Japan increased by 4.5% at 2.5 trillion yen from the previous month on a seasonally adjusted basis.

However total orders are forecasted to drop 3.4% to 7.9 trillion yen in the quarter to June from a rise of 3.6% or 8.2% in the three months ended March.

Private-sector machinery orders, excluding volatile orders for ships and electric power equipment, rose a seasonally adjusted 5.5% valued at 1 trillion yen in April. In the quarter to June, orders are estimated to drop 10.3% or 2.8 trillion yen from a gain of 2.2% or 3.1 trillion yen in the previous quarter.

Manufacturing orders surged 1.9% at 439 billion yen from a decline of 7% or 431 billion yen in March. In the April-June period orders in the sector may increase 1.5% or 1.42 trillion yen from a fall of 5.9% or 1.40 trillion yen a quarter ago.

Non manufacturing orders surged 8.8% or 573 billion yen in April from a slump of 9.5% at 526 billion yen in March. However in the quarter to June, non-manufacturing orders are likely to slip 18.9% at 1.44 trillion yen from a rise of 6.5% or 1.78 trillion yen in the previous quarter.

In addition, government orders spiked 23.7% or 268 billion yen in April from a fall of 12.7% at 216 billion yen in March, while orders in the three months ended June are estimated to surge 24.4% or 868 billion yen from a decline of 2.2% or 698 billion yen in the previous quarter.

Also overseas orders jumped 4.6% at 1 trillion from a drop of 16.1% or 973 billion yen and in the quarter to June orders may drop 0.1% or 3.46 trillion yen from a rise of 3.4% or 3.47 trillion yen in the January-March period.

Tokyo’s average condo price 8 times income

Japan Times reported today that according to a government white paper on infrastructure improvement released today the average price of a condominium unit in Tokyo was 63.49 million yen—eight times the average annual income of the ordinary Japanese worker.

Also the average price of a condominium in the Tokyo suburbs was 41.89 million yen, 5.2 times a worker’s average annual income.

Gainers & Losers

Clarion Co. Ltd. led advancers in the Nikkei 225 index shares with a rise of 6.03% followed by increases in Dowa Holdings of 2.89%, in Mizuho Trust & Banking of 2.88%, in Nippon Light Metal of 2.73%, in T & D Holdings Inc of 1.71%.

GS Yuasa Corp. led decliners in the Nikkei 225 index shares with drop of 6.70% followed by losses in Mitsumi Electric Co. of 5.70%, in Chiyoda Corp. of 4.73%, in Credit Saison Co. of 4.61%, in Mitsubishi Rayon Co. of 4.43%.

Realty stocks fell as well on fears rising interest rates and inflation will stifle development. Tokyu Land Corp. fell 4.39%, Sumitomo Realty declined 4.30% and Mitsui Fudosan fell 2.5%.


World markets review

In Tokyo Nikkei 225 Index closed lower 160.21 or 1.13% to 14,021.17, in Hong Kong Hang Seng index decreased 1,026.66 or 4.21% closed to 23,375.52. In Australia ASX 200 index lower 154.60 or 2.76% to close 5,437.50. In Malaysia KL Composite index decreased 0.02 or 0.00% closed to 1,230.96.

In South Korea Kospi Index decreased 34.58 or 1.91% to close at 1,774.38, in Thailand SET index closed lower 13.64 or 1.69% to 791.94 and Indonesia JSE Index edged decreased 36.26 or 1.50% to 2,373.82. Sensex index in India decreased 176.85 or 1.17% to 14,889.25.