Japan Business Confidence Falls

123jump.com Staff
01 Apr, 2009
New York City

Japan business confidence drops to record low in March quarter as managers see no immediate signs of clearing inventories and a rise in sales. Manufacturers in the monthly survey estimated more job cuts. Honda plans to cut production by 62,000 in North America. Stocks closed higher on weak yen.

[R]5:00AM New York, 7:00PM Tokyo - Japan’s business confidence drops to record low in March quarter as managers see no immediate signs of clearing inventories and a rise in sales. Manufacturers in the monthly survey estimated more job cuts. Honda plans to cut production by 62,000 in North America. Stocks closed higher on weak yen.[/R]

Japan stock indexes close higher despite a report by the Bank of Japan that business confidence by large manufacturers declined the most since 1974.

In Tokyo trading Nikkei 225 index rose 3% or 242.38 to 8,579.91, and the broader Topix Index edged up 2.6% or 20.16 to 793.82.

In the first section of the Tokyo Stock Exchange 20.6 billion shares worth 1.4 trillion yen were traded and in the second section 211 million shares valued at 1.7 billion yen changed hands.

Of the Nikkei 225 index stocks, 205 gained, 12 declined, and 7 were unchanged. Ebara Corp. led gainers in the index shares with a rise of 11.6% followed by OKI Electric Industries soaring 11.1%.

Japan Business Confidence Plunges in March Quarter

Bank of Japan reported today in its Tankan Survey that gauges business conditions that the diffusion index for large manufacturing companies dropped to –58 from –24 in the December quarter.

The index for medium non-manufacturing companies slipped to –31 from –9 in the previous three months.

The BoJ notes that medium sized manufacturing enterprises tumbled to –57 in the review period from –29 in the previous three months, while medium sized non-manufacturing industries plunged to –37 compared with –21 in the December quarter.

In addition, the index for small manufacturing enterprises declined to –57 from –29 in the quarter ended December and small non-manufacturing enterprises dropped –42 from –29 in the December quarter.

Honda to Cut Production in N. America

Reuters News reported yesterday that Honda Motor Co. will cut production in North America by 62,000 units by closing factories for 13 days starting in May.

Currently, Honda has assembly plants in Indiana, Ohio and Alabama in the United States and in Canada and Mexico.

There are also two engine plants and two transmission plants in North America. The automaker will lower pay for salaried and factory workers.

Honda has also offered buyouts and early retirement incentives to most of its 32,400 workers in the United States and Canada.

According to the report, spokesperson Ed Miller said salaried workers will also see compensation reduced in the financial year starting on April 1. Employees were also told that bonus payments for both hourly and salaried employees will be reduced or eliminated this year.

Gainers & Losers

Ebara Corp. led gainers in the Nikkei 225 index shares with a rise of 11.6% followed by rises in OKI Electric Industries of 11.1%, in Chuo Mitsui Trust of 10.7%, in Sojitz Corp. of 10.3%, and Citizen Holdings of 10%.

Konica Minolta Holdings led decliners in the Nikkei 225 index shares with a fall of 3.2% followed by losses in All Nippon Airways of 2.9%, in Sanyo Electric of 2.7%, Kansai Electric Power of 1.6%, and Nisshinbo Holdings of 1.6%.