Tokyo Falls 1.4%, Morimoto Seeks Protection

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

Wages in Japan fell 0.1% in October. Morimoto Company, the condominium developer filed for bankruptcy after going public only nine months ago. For the year nearly 23 large real estate developers have sought protection from creditors. Nikkei 225 index dropped 1.4%.

[R]5:00AM New York, 7:00PM Tokyo - Japan’s wages drops 0.1% in October. Morimoto Co. files for bankruptcy protection with liabilities of 161.5 billion yen.[/R]

Stocks in Japan plummeted on news that condominium developer Morimoto filed for bankruptcy on Friday last week. A government report also indicated that wages declined 0.1% in October.

In Tokyo trading Nikkei 225 fell 1.4% or 115.05 to 8,397.22, and the broader Topix Index shed 0.9% or 7.35 to 827.47.

In the first section of the Tokyo Stock Exchange 6.9 billion shares valued at 503 billion yen were traded and in the second section 152 million shares worth 1.3 billion yen changed hands.

Of the Nikkei 225 stocks 53 increased, 165 declined, and 7 were unchanged. Sanyo Electric led advancers in the index shares with a rise of 8.6% followed by Dowa Holdings rising 6.9%.

Morimoto Files Bankruptcy

Condominium developer Morimoto Co. Ltd on Friday filed bankruptcy protection nine months after its initial public offering with a total debt of 161.5 billion yen.

The Morimoto bankruptcy is the second largest this year and total corporate failures of listed companies reached the highest level since the World War II.

Bloomberg News reported that 23 of the 30 bankruptcies among listed companies this year were in real estate and construction sectors.

Wages Fall 0.1% in October

Ministry of Health, Labor and Welfare today reported in the provisional report on the monthly labour survey for October that total cash earnings declined 0.1% to 274,751 yen, while contractual cash earnings dipped 0.1% to 270,168 yen.

Scheduled cash earnings however rose 0.2% to 250,812 yen, but non-scheduled earnings and special cash earnings shed 3.1% to 19,356 yen and 6.2% to 4,583 yen respectively.

According to the report, total hours worked declined 0.1% to 152.2 hours, with non-scheduled hours worked falling 4.5% to 10.6 hours.

Scheduled hours rose 0.5% to 141.6 hours.

In addition, regular employees increased 1.3% to 45.1 million as full-time employees soared 1.5% to 33.2 million and part-time employees gained 0.7% to 11.8 million.

The accession rate dropped 0.22 percentage points to 1.91% and the separation rate declined 0.04 percentage points to 1.98%.

Financial Institutions Seek 4 trillion yen in Capital

The Nikkei News reported today that more than ten Japanese banks, insurers and brokerages are likely to raise 4 trillion yen to bolster weakening balance sheets.

Gainers & Losers

Sanyo Electric led advancers in the Nikkei 225 index shares with a rise of 8.6% followed by increases in Dowa Holdings Co. of 6.9%, in Chuo Mitsui Trust of 5.3%, in Toho Zinc of 4.6%, and NTT DoCoMo of 3.7%.

Suzuki Motors led decliners in the Nikkei 225 index shares with a fall of 8.1% followed by losses in Sumitomo Osaka of 7.2%, in Taiheiyo Cement of 6.7%, in JGC Corp. of 6%, and OKI Electric Industries of 5.8%.

Realty stocks declined as Morimoto Co. Ltd filed for bankruptcy protection. Mitsui Estate Co. fell 5.6% and Mitsui Fudosan declined 4.6%.