Business Confidence Declines

123jump.com Staff
01 Jul, 2008
New York City

Stocks in Japan fell for the eighth trading session in a row as rising oil prices and continue credit market worries keep investors away. Separately Tankan business survey showed a decline in sentiment across large and small manufacturers for the three months to June. Separately wages in May rose 0.2% an cash earnings rose 0.1%. U.S. auto sales in June declined and Toyota sales fell 21% from a year ago.

[R]5:00AM New York, 7:00PM Tokyo - Tankan Business Confidence Drops in quarter to June. Wages rise 0.2% in May.

Japan stock indexes dipped marginally and extended losses for the eighth trading day in a row. The strengthening yen and gloomy outlook shed by the Tankan survey weighed on the market, but the continued rally in metal prices helped to limit the decline.

Market sentiment

In Tokyo trading Nikkei 225 fell 0.13% or 18.18 at 13,463.20 and the broader Topix Index declined 0.1% or 0.03 at 1,320.07.

In the first section of the Tokyo Stock Exchange 9.1 billion shares worth 997 billion yen were traded and in the second section 195 million shares valued at 2.5 billion yen changed hands.

Of the Nikkei 225 stocks 98 rose, 118 declined, and 9 were unchanged. Chuo Mitsui Trust led advancers in the index shares with a rise of 4.43% followed by increases in Showa Denko KK of 3.55%.

Business sentiment Drops

The Bank of Japan reported on its Website today that the Tankan index of manufacturer sentiment declined by 6 points from 11 points in the quarter to March to 5 points in the three months ended June, while non-manufacturer sentiment fell 2 points from a quarter earlier to 10 points in quarter ended June.

Sentiment for large companies is further expected to decline by 1 point to 4 points in the quarter ended September.

Also sentiment for medium-sized manufacturing industries fell 7 points from 5 points in the three months in March to –2 points in the quarter to June, and sentiment for non-manufacturing industries slipped 2 points to –5 points in June.

The index of small enterprises manufacturer sentiment declined 4 points to –10 points in June. Similarly, small enterprises non-manufacturing sentiment declined by 5 points from –15 points in the quarter to March to-20 points in the three months to June.

According to the survey, the financial position of large and medium sized companies remained unchanged in the period under review.

Large companies profits are projected to decline 7% in the year ending March 31 from earlier fall of 0.3% predicted in the quarter ago period, while capital spending is forecasted to expand 2.4% this fiscal year.

Wages Rise 0.2% in May

The Ministry of Health, Labor and Welfare reported on its Website today that wages rose 0.2% to 275,815 yen in May and contractual cash earnings rose 0.1% to 268,711 yen.

Scheduled cash earnings advanced 0.3% to 249,519 yen, while non-scheduled cash earnings slid 1% to 19,192 yen.

The total hours worked climbed 0.4% to 146.8 hours, but scheduled hours dropped 0.3% at 136.3 hours and non-scheduled hours fell 0.9% to 10.5 hours.

Labor ministry statistics also showed regular employment and labor turnover gained in all industries gained 1.7%.

Gainers & Losers

Chuo Mitsui Trust led advancers in the Nikkei 225 index shares with a rise of 4.43% followed by rises in Showa Denko KK of 3.55%, in Mitsubishi Corp of 3.43%, in Mitsui & Co of 3.41%, and Tokyo Electric Power of 3.11%.

Commodity stocks rose as crude oil prices jumped above $143 per barrel. Sumitomo Corp increased 2.87% and Nippon Oil jumped 2.81% as a result.

Nitto Boseki Co led decliners in the Nikkei 225 index shares with a fall of 6.43% followed by losses in Tokai Carbon Co of 5.46%, in Tokyu Land Corp. of 4.98%, in Fanuc Co Ltd of 4.53%, and Sanyo Electric of 4.05%.

Exporters fell as the yen gained 0.44% to 105.78 against the dollar. Canon dropped 2.20% and Sony shed 2.96%.