Japan Machinery Orders Drop; Stocks Rise

Darlington Musarurwa
10 Dec, 2008
New York City

Machinery orders in Japan dropped 14.4% in October as the domestic economy slumps on weakening export orders. Stocks in Tokyo rose 3.2% on the hopes that the U.S. will soon offer a bailout plan of $15 billion to automakers. Beer and brewed beverages shipment dropped 8% in the month.

[R]5:00AM New York, 7:00PM Tokyo - Japan''s machinery orders decline 14.4% in October.[/R]

Japan stock indexes soared led by realty stocks and commodities on Nikkei News reports the government will extend 2 billion yen in loans to small and midsized developers that are unable to refinance through banks.

Shipping lines also rose after a measure of freight charges extended gains yesterday on expectations global demand for raw materials will be boosted by stimulus plans in the U.S., China and India.

In Tokyo trading Nikkei 225 gained 3.2% or 264.37 to 8,660.24, and the broader Topix Index increased 2% or 16.61 to 834.55.

In the first section of the Tokyo Stock Exchange 8.7 billion shares worth 642 billion yen were traded and in the second section 119 billion shares valued at 1.2 billion yen changed hands.

Of the Nikkei 225 index stocks, 183 rose, 37 declined, and 5 were unchanged. Tokyu Land Corp. led gainers in the index shares with a rise of 15.7% on the news that government plans to bailout small developers.

Machinery Orders Fall 14.4%

Cabinet Office reported today that the total value of machinery orders received by 280 manufacturers in Japan plunged 14.4% to 2 trillion yen from a drop of 3% in September.

In the three months to September, orders slid 10.1% to 7.2 trillion and are forecasted to dip 3.1% to 7 trillion yen in the quarter to December.

Private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, dropped 4.4% to 899 billion yen from a rise of 5.5% or 940 billion yen September. Orders in the quarter to September declined 10.4% to 2.8 trillion yen.

Private sector machinery orders are however projected to gain 1.2% to 2.9 trillion yen in the three months to December.

The office also reported that manufacturing orders fell 2.2% to 424 billion yen from a rise of 9.7% in September, while orders in the three months to September fell 10.9% to 1.2 trillion yen.

Manufacturing orders are also forecasted to gain 2.5% to 1.3 trillion yen in the quarter to December.

Non-manufacturing orders slid 2.3% to 482 billion yen from a drop of 1.3% the previous month. Non manufacturing order also shed 12% to 1.5 trillion yen in the quarter to September and orders are estimated to gain 3.6% to 1.6 trillion yen.

The report notes that government orders fell 0.2% to 216.6 billion yen and plunged 10.1% to 665 billion yen in the quarter to September, while orders soared 8.9% to 724 billion yen.

Beer Shipments Fall 8% in November

Nikkei News reported today that beer shipments and brewed beverages dropped 8% in November and annual consumption is likely to reach record lows this year.

Separately, the online edition said mobile phone shipments dropped 57.8% in October to 1.08 million units, the lowest since April 2003.

Gainers & Losers

Tokyu Land Corp. led advancers in the Nikkei 225 index shares with a rise of 15.7% followed by increases in Dowa Holdings of 11.2%, in Tokyo Electron of 11%, in Mitsui Mining & Smelting of 10.7%, and Nikon Corp of 10.6%.

Heiwa Real Estate and Tokyo Dome Corp. advanced 8.1% and 7.6% respectively.

Shipping lines increased after the Baltic Dry Index gained 1.2% yesterday. Mitsui OSK Lines advanced 10.4% as a result.

Taiheiyo Cement led decliners in the Nikkei 225 index shares with a drop of 6.8% followed by losses in T & D Holdings of 5.5%, in Japan Tobacco of 4.4%, in Citizen Holdings of 4.1%, and Sky Perfect Japan of 4%.