Japan Machinery Orders Jump 10.8% in May

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

Financial stocks increased after the US Fed Reserve Chairman said SEC and the bank have signed a memorandum of understanding that is meant to strengthen the surveillance of investment banks. Tokyo Dome led advancers in the Nikkei 225 index shares with a rise of 5.38% followed by increases in Mitsui Fudosan of 5.04%. Aeon Co Ltd led decliners with a drop of 5.11% after operating profit in the first quarter tumbled 20% to 22.6 billion yen as clothing sales at Jusco general merchandise lost 2.7%.

[R]5:00AM New York, 7:00PM - Japan machinery orders jump 10.8% in May.[/R]

Stocks in Japan rose led by realty and financial stocks after a government report showed that machinery orders, which measures capital spending for the next three months, unexpectedly rose in May.

In addition, the decision by the Federal Reserve and SEC to strengthen surveillance of investment banks also boosted financial stocks. Gains were limited by news that Iran had test-fired missiles.

Market Sentiment

In Tokyo trading Nikkei 225 rose 0.15% or 19.03 at 13,052.13, and the broader Topix Index edged up 0.2% or 2.02 at 1,285.53.

In the first section of the Tokyo Stock Exchange 9.1 billion shares worth 984 billion yen were traded and in the second section 125 million shares valued at 2.3 billion yen changed hands.

Of the Nikkei 225 stocks 118 gained, 91 declined, and 16 were unchanged. Tokyo Dome Corp led advancers in the index shares with a rise 5.38%.

Machinery Orders Climb 10.8% in May

Japan’s Cabinet Office reported on its Web site today that the total value of machinery orders received by 280 manufacturers operating in Japan gained by 10.8% or 2.8 trillion yen in May from 4.5% or 2.5 trillion yen in the previous month on a seasonally adjusted basis.

It is forecasted that total machinery orders in the April to June period will fall 3.4% at 7.9 trillion yen.

Private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, jumped by 10.4% at 1.19 trillion yen in May from 5.5% at 1 trillion yen in April. Also private sector orders are expected to slump 10.3% or 2.8 trillion yen in the three months ended June.

The report also indicated that manufacturing advanced 12.2% valued at 493 billion yen from 1.9% or 439 billion a month earlier, and orders in the sector are projected to increase 1.5% at 1.42 trillion yen in the quarter to June.

Non-manufacturing orders, excluding volatile ones, remained unchanged at 8.8% at 623 billion yen, but orders are forecasted to fall 18.9% at 1.4 trillion yen in the April to June period.

Government orders however tumbled 13.9% or 230 billion yen from rise of 23.7% or 268 billion yen in April, but orders are forecasted to gain 24.4% at 868 billion yen in the quarter to June.

Also overseas orders jumped 21.1% at 1.2 trillion yen from 4.6% at 1 trillion the previous month. Orders are projected to slip 0.1% or 3.46 trillion in the three months to June.

Fed and SEC Sign MoU

The Federal Reserve Bank reported on its Web site today that Governor Ben Bernanke said in a speech at the Federal Deposit Insurance Corporation’s Forum on Mortgage Lending for Low and Moderate Income Households in Virginia that the Securities and Exchange Commission and the Fed recently agreed on a memorandum of understanding.

“Under the MOU, the SEC and the Fed will freely share information and analyses pertaining to the financial conditions of primary dealers. The two agencies have also agreed to work jointly with the firms to support their continued efforts to strengthen their balance sheets, their liquidity, and their risk-management practices,” said Bernanke.

Gainers & Losers

Tokyo Dome Corp. led advancers in the Nikkei 225 index shares with a rise of 5.38% followed by increases in Mitsui Fudosan of 5.04%, in Mizuho Financial Holdings 3.85%, in Ebara Corp of 3.60%, and Suzuki Motors of 3.52%.

Financial stocks also increased after the US Federal Reserve Chairman said the Securities and Exchange Commission and bank have signed a memorandum of understanding that is meant to strengthen the surveillance of investment banks.

Sumitomo Trust & Banking advanced 2.74% and Mitsubishi UFJ Financial Group increased 2.25%.

Aeon Co Ltd led decliners in the Nikkei 225 index shares with a drop of 5.11% followed by losses in GS Yuasa Corp of 4.94%, in Konami Corp of 4.74%, in Toppan Printing of 3.75%, and Dai Nippon Printing of 3.71%.

Aeon Co Ltd fell after operating profit in the first quarter ending May 20 tumbled 20% to 22.6 billion yen as clothing sales at Jusco general merchandise dropped 2.7%.

Commodity stocks also slumped as crude oil prices slid 3.8% to $136.04 a barrel yesterday. Inpex shed 2.36% and Mitsubishi Corp declined 1.84%.