Weak Auto Sales Estimates in Japan

Darlington Musarurwa
18 Dec, 2008
New York City

Japan stocks rise on interest rate cut hopes. Winter bonuses fall 0.4%, a decline for the first time in six years. Auto sales in 2009 are expected to fall below 5 million vehicles for the first time in 31 years.

[R]5:00AM New York, 7:00PM Tokyo - Japan stocks rise on interest rate cut hopes. Winter bonuses fall 0.4%, a decline for the first time in six years. Auto sales in 2009 are expected to fall below 5 million vehicles for the first time in 31 years.[/R]

Stocks in Japan rose buoyed by financial stocks on speculation that the Bank of Japan may cut its key rate after a sharp reduction in rates in the U.S., Europe, China, India, Australia and UK.

In Tokyo trading Nikkei 225 index rose 0.6% or 54.71 to 8,667.23, and the broader Topix Index edged up 0.1% or 0.23 to 838.69.

In the first section of the Tokyo Stock Exchange 9.1 billion shares worth 687 billion yen were traded, and in the second section 157 million shares valued at 1.3 billion yen changed hands.

Of the Nikkei 225 index stocks, 125 rose, 86 declined, and 14 were unchanged. Sumitomo Mitsui Financial Group led gainers in the index shares with a rise of 8.5% on rising speculation the central bank will slash its key rate to stave off a deepening recession.

Winter Bonuses Fall 0.4%

Kyodo News reported yesterday that Japan Business Federation said winter bonuses at the country''s major companies fell 0.4% to 889,064 yen in 2008, dropping for the first time in six years.

Winter bonuses in the manufacturing sector rose by 0.21% to 893,517 yen on average most of the companies'' management and unions had concluded winter-bonus talks.

Workers at steelmakers saw an average 5.1% decline in winter bonus to 1,042,737 yen, while bonus at automakers slipped 0.5% to 972,926 yen.

Bonus at shipbuilders rose 5.6% to 834,640 yen, and at home electronic appliance makers has a 5.1% increase to 825,490 yen.

The bonus at non-manufacturing sector dropped 2.1% to 875,786 yen.

Companies in all of the six business categories in the non-manufacturing sector experienced a fall in average bonuses.

Domestic 2009 Car Sales to Drop 4.9%

Nikkei News reported today that Japan Automobile Manufacturers Association expects domestic car sales to decline 4.9% to 4.86 million in 2009 from the level expected this year.

Sales in 2009 are expected to be for first time in 31 years below 5 million units.

Separately, the online edition said Real Estate Economic Institute expects sales of new condominiums in the Tokyo metropolitan region are forecasted to rise 11.6% to 47,000 units in 2009.

Gainers & Losers

Sumitomo Mitsui Financial Group led advancers in the Nikkei 225 index stocks with an increase of 8.5% followed by increases in Mizuho Financial Group of 8.1%, in GS Yuasa Corp. of 7.6%, in JFE Holdings of 7.2%, and Sumitomo Trust & Banking of 7.1%.

Sumitomo Mitsui Financial Group and other financial stocks rose on speculation that Bank of Japan will cut its key rate in order to stave off a deepening recession.

Steelmakers increased. Nippon Steel soared 4.3% and Japan Steel Work jumped 4.1%.

Shin-Etsu Chemicals led decliners in the Nikkei 225 index shares with a fall of 8.5% followed by losses in Fujifilm of 5.8%, in Japan Tobacco of 5.6%, in NGK Insulators of 5.3%, and Konica Minolta Holdings of 5.1%.