Nikkei Plunges 4.5%; Sony, Toshiba Losses

123jump.com Staff
13 Jan, 2009
New York City

Stocks in Japan plunged 4.5% after a day after holiday. Rising yen, falling corporate profits and declining current account surplus added to investors anxieties. Sony and Toshiba expect operating loss for the current fiscal year. Current account surplus plunged 66% in November.

[R]5:00AM New York, 7:00PM Tokyo- Japan’s current account surplus shrinks 66% to 581 billion yen in November. Sony estimated first operating loss in 14 years.[/R]

Stocks in Japan dropped 4.5% on mounting worries that Sony Corp. will realize its first operating loss in 14 years. Toshiba is also expected to post its first operating loss in seven years, sparking worries that large companies will be affected by slowing demand.

Exporters also plunged after the yen rose 89.16 against the dollar. The yen is the only currency that has gained against dollar in the last nine months. Dollar has gained between 10% and 19% against major currencies but fallen nearly 10% against the yen.

In Tokyo trading Nikkei 225 index fell 4.8% or 422.89 to 8,443.91, and the broader Topix Index shed 4.8% or 40.90 to 422.89.

The market was closed yesterday for a public holiday.

In the first section of the Tokyo Stock Exchange 9.2 billion shares worth 627 billion yen were traded and in the second section 117 million shares valued at 1.1 billion yen changed hands.

Of the Nikkei 225 index stocks, 6 increased, 218 declined, and one was unchanged. Nisshinbo led gainers in the index shares with a rise of 1.8%.

Current Account Surplus Shrinks 66%

Ministry of Finance reported today that the country’s current account surplus contracted 66% to 581.2 billion yen in November from the same period a year ago.

Analysts had forecasted that it would shrink to 600 billion yen.

Exports plunged 26.5% year-on-year in the same period, while imports dropped 13.7%.

The income surplus - measuring the difference in money earned abroad and payment to foreign investors on the domestic market - fell 15.5% to 844.7 billion yen from the comparable year ago period.

Separately, the finance ministry said the net capital outflow from Japan were 21 trillion yen for 2008 as foreign investors unloaded stocks and bonds in the wake of the global financial turbulence.

Bank Lending Rises 4.1% in December

The Bank of Japan reported today that the average daily balance of Japanese bank lending gained 4.1% to 407.18 trillion yen in December from a year earlier.

The loan balance rose 4.6% after adjustment for special factors.

The Yen Rises

The yen eased to 89.16 today against the dollar after rising 88.88 yesterday.

Gainers & Losers

Nisshinbo Industries led gainers in the Nikkei 225 index shares with a rise of 1.8% followed by increases in KDDI Corp. of 1.4%, in Terumo Corp. of 1.4%, in NTT DoCoMo Inc. of 0.5% and Shiseido Co Ltd. of 0.3%.

Pioneer Corp. led decliners in the Nikkei 225 index shares with a fall of 14.1% followed by losses in CSK Holdings Corp. of 13.2%, in Trend Micro Inc. of 12.7%, in Nomura Holdings of 12.1%, and Mitsui Mining & Smelting of 10.5%.

Pioneer Corp. fell on the concern that earnings of consumer electronic companies will decline as the U.S. led global financial market crisis has led large companies in Japan to declare losses.

Sony Corp. dropped 8.9% on the news that the company might post an operating loss of 100 billion yen for the year through March, its first operating loss in 14 years.

Sharp lost 9.2%.

Mitsui Mining & Smelting declined as crude oil prices for February delivery plunged 7.9% to $37.59 a barrel and gold prices tumbled $33 to $824 per ounce.

Sony to Post 100 billion Operating Loss

The Nikkei News reported today that Sony will post a 100 billion yen operating loss in the fiscal year through March, which is its first since 1995.

Sony’s electronics division has been affected by dropping sales of liquid crystal display screens and a rising yen.

The report notes that the loss could soar to 200 billion yen.

In its October review the company downgraded its operating profit forecast by 57% to 200 billion from the previous target of 470 billion yen.

The public television broadcaster NHK said Toshiba Corp. will realize an operating loss for the fiscal year ending March on a slump of its memory business.