Tokyo Stocks Plunge Again, Weak Orders

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

Machinery orders in Japan decline 16.2% to 754 billion yen in November, the sharp decline in orders was driven by weakness in domestic and foreign orders. Stocks plunged on weaker than expected orders. Nissan trims domestic auto production. Sanyo lowers the annual profit target to break even.

[R]5:00AM New York, 7:00PM- Machinery orders in Japan decline 16.2% to 754 billion yen in November. Nissan trims domestic auto production. Sanyo lowers the annual profit target to break even.[/R]

The benchmark index in Japan slid 5% as investors were unnerved by news that machinery orders declined more-than-forecasted in November.

Airlines trimmed losses as oil prices dropped to $36 per barrel.

In Tokyo trading ASX 200 index fell 5% or 415.14 to 8,023.31, and the broader Topix Index declined 2.9% or 23.40 to 795.99.

In the first section of the Tokyo Stock Exchange 9.4 billion shares worth 632 billion yen were traded and in the second section 93 million shares valued at 1 billion yen changed hands.

Of the Nikkei 225 index stocks, 8 rose, 215 declined, and 2 were unchanged. Sky Perfect JSAT led gainers in the index shares with a rise of 2.6%.

Japan’s Machinery Orders Plunge 16.2%

Japan’s cabinet office reported today that the country’s private sector machinery orders, excluding volatile orders for ships and from electrical power companies, fell 16.2% to 754 billion yen in November. Orders dropped 4.4% or 899 billion yen in October.

Private sector machinery orders declined 10.4% or 2.8 trillion yen in November and are forecasted to rise 1.2% to 2.9 trillion yen in the three months to December.

The total value of machinery orders received by 280 manufacturers operating in Japan fell by 13.8% or 1.74 trillion yen in November from a plunge of 14.4% or 2 trillion yen the previous month. In the September quarter orders fell 10.1% or 7.3 billion yen.

Total machinery orders are projected to drop 3.1% to 7 billion yen in the quarter to December.

Manufacturing orders slipped 33.2% to 283 billion yen in the review period from a decline of 2.2% or 424 billion yen the previous month. In the three months to September manufacturing orders plummeted 10.9% or 1.29 trillion yen.

Manufacturing orders are however forecasted to jump 2.5% to 1.3 trillion yen.

The cabinet office also noted that non-manufacturing machinery orders, excluding volatile ones, increased 0.5% or 485 billion yen in November from a decline of 2.3% or 482 billion yen a month ago.

Non-manufacturing orders in the three months ended September fell 12% to 1.58 trillion yen and are projected to advance 3.6% to 1.6 trillion in the quarter to December.

However government orders soared 10.9% to 240 billion yen in November from a drop of 0.2% or 216 billion yen in October. In the September quarter orders dipped 10.1% or 665 billion yen.

Government orders are expected to rise 8.9% to 724 billion yen in the three months ended December.

In addition, overseas orders plunged 14.4% to 590 billion yen in November from a rise of 37.2% or 689 billion yen a month ago. Overseas orders slipped 7.3% in the three months to September to 3.1 trillion yen.

Orders from overseas are forecasted to drop 13.3% to 2.7 trillion yen in the three months ending December.

MUFG to Book 288 billion Yen Loss

Mitsubishi UFJ Financial Group reported today that the amount of losses on write-down on marketable domestic equity securities of the Bank of Tokyo-Mitsubishi UFJ for the three months ending December 31 were 257 billion yen.

The lender expects to recognize losses of 31 billion yen on write-down of marketable domestic equity securities.

Gainers & Losers

Sky Perfect JSAT led gainers in the Nikkei 225 index shares with a rise of 2.6% followed by increases in East Japan Railway of 1.4%, in All Nippon Airways of 1.2%, in Japan Airlines of 1%, and Chubu Electric Power of 0.8%.

Airlines gained as crude oil prices fell to $36 per barrel.

Advantest Corp. led decliners in the Nikkei 225 index shares with a fall of 9.8% followed by losses in CSK Holdings Corp. of 9.6%, in Alps Electric Industries of 9.2%, in Fast Retailing of 9.1%, and Hitachi Construction Machinery of 9%.

Sanyo Cuts profit Forecast to Zero

Sanyo Electric Co. today cut its profit forecast for the year through March to breakeven from the earlier projection of 35 billion yen.

Nissan Cuts Production

Nissan Motor Co. announced today it will cut domestic vehicle production by 64,000 for February and March as the domestic demand continues to slow.