Japan Machinery Orders, Prices Fall

Darlington Musarurwa
10 Jun, 2009
New York City

Stocks in Japan closed higher after financials and shipping companies rallied. Three largest shipping companies edged higher after comments from Credit Suisse. Separately, K-Line is preparing to cut additional 3 billion yen in costs. Machinery orders declined April.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan closed higher after financials and shipping companies rallied. Three largest shipping companies edged higher after comments from Credit Suisse. Separately, K-Line is preparing to cut additional 3 billion yen in costs. Machinery orders declined April.[/R]

Japan stocks closed higher on commodity stocks and a rally in financial stocks. Gold prices gained 0.2% to $954.70 an ounce and crude oil prices jumped 2.7% to $70 per barrel.

Shipping lines added impetus to the growth after Credit Suisse upgraded the three largest shipping companies stocks.

In Tokyo trading Nikkei 225 Index advanced 2.1% or 204.67 to 9,991.49, and the broader Topix Index increased 2% or 18.77 to 937.01.

In the first section of the Tokyo Stock Exchange 28.2 billion shares valued at 1.7 trillion yen were traded and in the second section 589 million shares worth 6.6 billion yen changed hands.

Of the Nikkei 225 index stocks, 204 increased, 17 fell, and 14 were unchanged. Kawasaki Heavy Industries led gainers in the index stocks after it announced the nickel hydrogen battery for bus transportation use.

Japan Machinery Orders Drop 12.7%

Cabinet Office reported today that the country’s total value of machinery orders received by 280 manufacturers operating in Japan fell by 12.7% to 1.4 trillion yen in April from the previous month on a seasonally adjusted basis.

In the January to March period orders fell 16.1% to 4.8 trillion yen and orders are forecasted to drop 9% to 4.4 trillion yen in April to June.

Private sector machinery orders, excluding volatile ones for ships and those from electric power companies, fell seasonally adjusted by 5.4% to 688 billion yen in April and shed 9.9% to 2.2 trillion yen in the January to March period.

According to the report, manufacturing orders dipped 9.4% to 232.6 billion yen and fell 31.1% to 685.1 billion yen in the three months ended March. Manufacturing orders are estimated to advance 5.1% to 720 billion yen.

Non-manufacturing orders declined 8.8% to 452.7 billion yen in April, and rose 4.9% to 1.5 trillion in the quarter ended March. Orders are however expected to drop 7.5% to 1.4 trillion yen in the April to June period.

Government orders declined 22.1% to 268.1 billion yen in the review period, while orders rose 1% to 670.6 billion yen in the March quarter. In addition, government orders are projected to rise 2.8% to 1.2 trillion yen.

Japan Producer Prices Fall 5.4% in May

Bank of Japan reported today that the country’s wholesale price index, which measures producer prices, slipped 5.4% in May from a drop of 4% in the same period a year earlier.

The export price index dipped 5% in May, while the fell 23.9% in the period.

Gainers & Losers

Shipping lines advanced after Credit Suisse Group AG upgraded the stock to ""outperform"" from ""neutral"". Kawasaki Kisen increased 6.4% to 449 yen and Mitsui OSK Lines rose 5.5%.

Separately, Kawasaki Kisen Kaisha Ltd also known in the shipping industry as K-Line is expected to trim operating costs by 3 billion yen and trim its operating routes to markets that are facing sharp fall in demand.

Commodity stocks rose on rising metal prices. Nippon Mining advanced 5.2% and Mitsubishi Corp. edged up 6.3%.

Financials rallied after the ten U.S. banks are preparing to repay the U.S. government the bailout funds they received.

Sumitomo Mitsui Financial Group Inc increased 5.7% to 4,300 yen, Nomura Holdings, Inc jumped 7% to 848 yen and Mizuho Financial Group Inc added 6.1% to 261 yen.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 204.67 or 2.09% to 9,991.49, Hang Seng index in Hong Kong increased 727.17 or 4.03% closed to 18,785.66, CSI 300 index in China higher 29.04 or 0.98% closed to 2,989.60. ASX 200 index in Australia increased 89.50 or 2.27% closed to 4,024.40. The KL Composite index in Malaysia higher 11.18 or 1.04% closed to 1,082.97.

The Kospi Index in South Korea increased 43.04 or 3.14% to close at 1,414.88.SET index in Thailand closed higher 16.82 or 2.77% to 624.55 and JSE Index in Indonesia increased 15.52 or 0.74% closed to 2,108.81. The Sensex index in India increased 339.81 or 2.25% closed to 15,466.81.