Stimulus Package in Japan, Toyota Cuts Bonus

Darlington Musarurwa
03 Dec, 2008
New York City

Japan government is likely to provide additional 100 trillion yen economic stimulus package. The falling exports and weak domestic economy has dragged economy in Japan to recessionary conditions. Toyota will cut bonuses for senior staff but not for top executives.

[R]5:00AM New York, 7:00PM Tokyo - Japan considers to inject 10 trillion yen to stimulate economy.[/R]

Japan market averages fell on news that the country is considering injecting 10 trillion yen in order to stimulate the economy.

Carmaker’s also dragged as Toyota slashed management bonuses by 10%.

In Tokyo trading Nikkei 225 fell 1.4% or 115.05 to 8,397.22, and the broader Topix Index advanced 1.5% or 12.07 to 799.19.

In the first section of the Tokyo Stock Exchange 7.8 billion shares valued at 575 billion yen were traded and in the second section 193 million shares worth 1.1 billion yen changed hands.

Of the Nikkei 2235 stocks 53 rose, 165 declined, and 7 were unchanged. Sanyo Electric led advancers in the index shares with a rise of 8.6%.

Japan Considers Y10 trillion Economic Package

Nikkei News reported today that the Japanese government and the ruling parties are presently considering extra spending of more than 10 trillion in order to further stimulate the economy.

The funding will not be subject to the ceilings set under the budget framework for the next fiscal year.

Fast Retailing Sales Rise 32% in November

Fast Retailing reported yesterday that existing-store sales increased 32.2% year-on-year and sales at direct run stores gained 35.8%. Total sales, including direct sales soared 35.4%.

The retailer said sales rose as persistent cold weather increased purchases of winter garments including fleeces and down jackets.

Also Nomura Securities Co. raised its rating on the stock to “strong buy” from “buy.”

Separately Macquarie analyst upgraded its rating on Seven & I to “outperform” from “neutral.”

Gainers & Losers

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

Suzuki Motor Co. led decliners in the Nikkei 225 index shares with a drop 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%.

Automakers dropped as Toyota cut its management bonuses by 10%. Mazda Motor Co. shed 5.5% and Mitsubishi Motors lost 5.3%.

Toyota to Cut Management Bonuses by 10%

AFP reported today that Toyota Motor Corp. will cut management bonuses by 10% and lower domestic production. However, top executives will be excluded.

According to the automakers company spokeswoman Kayo Doi, an estimated 8,700 managers will have their year-end bonuses slashed.

The company also will suspend a production line for its Lexus brand at the Tahara plant in Aichi prefecture for an additional two days at year''s end and suspend production at its subsidiary Toyota Motor Kyushu for an additional two days.

“We have decided to suspend production at this factory since Lexus vehicles for both the overseas and domestic markets are produced here and sales have worsened. We''re facing an inventory glut,” said Doi.