Services Demand in Japan Rise; Marubeni Surges

Darlington Musarurwa
14 Aug, 2009
New York City

Japanese demand for services increased 0.1% in June as the economic stimulus spurs the demand across the economy. Commodities and resource linked stocks jumped on the expectations of higher Chinese demand. Container ship lines attempt to lift rates ahead of the busiest shipment season.

[R]5:00AM New York, 7:00PM Tokyo- Japan’s demand for services increase 0.1% in June as the economic stimulus spurs the demand across the economy. Commodities and resource linked stocks jumped on the expectations of higher Chinese demand. Container ship lines attempt to lift rates ahead of the busiest shipment season.[/R]

Stocks in Japan rose to a 10-month high and for the fifth consecutive week spurred by commodity stocks and increased demand for services, a government report showed.

Crude oil prices rose 0.5% to $70.5 per barrel and crude oil prices advanced 0.4% to $956.5 per ounce on expectations of rising demand in China.

In Tokyo trading Nikkei 225 index increased 0.8% or 80.14 to 10, 597.33, and the broader Topix Index advanced 0.5% or 5.16 to 973.57.

In the first section of the Tokyo Stock Exchange 20.5 billion shares worth 1.5 trillion yen were traded and in the second section 357 million shares valued at 6.2 billion yen changed hands.

Of the Nikkei 225 index stocks, 146 rose, 58 dropped, and 21 were unchanged. Hitachi Construction Machinery led gainers in the index shares with a rise of 8.4% on signs the global economy is recovering.

Services Demand Rises in June

Japan’s Ministry of Economy, Trade and Industry reported today the Indices of Tertiary Industry Activity in June advanced 0.1% to 96.1 in seasonally adjusted terms.

Industries that contributed to an increase are scientific research; professional and technical services; finance and insurance; medical, health care and welfare; miscellaneous services and transport and postal activities.

However, industries that contributed to the decrease were information and communications; wholesale and retail trade; accommodations; eating and drinking services; electricity, gas, heat supply and water; real estate and goods rental and leasing; learning support, and compound services.

The BoJ to Extend Credit

The Bank of Japan reported today in minutes from the July 14-15 monetary policy meeting that the central bank may extend credit programs to 2010 to help struggling firms.

“In order to continue facilitating corporate financing and ensuring market stability, the Bank decided, by unanimous vote, to extend the period for which temporary measures, such as outright purchases of CP and corporate bonds and special funds-supplying operations to finance corporate financing,” as noted in the minutes.

Yen Falls 1.2%

The yen fell 1.3% to 95.08 from 95.05 yesterday. Currency traders have speculated that technology and industrial companies are repatriating their foreign earnings at a higher rate than in the last three years.

Gainers & Losers

Commodities and resource linked stocks rose on the optimism that demand from China will be sustained as the U.S. gears up for the pre-Christmas inventories.

Energy stocks gained after crude oil prices rose 0.5% to $70.5 per barrel.

Mitsubishi Corp. increased 3.3% to 1,994 yen, Marubeni surged 5.8% to 471 yen and Mitsui & Company increased 2.8% to 1,295 yen.

Construction equipment makers surged. Komatsu added 5.3% to 1,716 yen and Hitachi Construction Company surged 8.4% to 1,930 yen after Nomura Holdings cited widening of manufacturing and mining sector recovery from China to Brazil and Indonesia.

Tyre makers dropped on rising crude oil prices. Yokohama Rubber declined 3.3%, Bridgestone Corp. shed 1.2% and Toppan Printing dipped 1.1%.

Mitsui OSK and Nippon Yusen edged higher after an association of container shipping lines suggested a rate revision of $500 a container on Asia-U.S. route.

Nippon Steel, JFE Holdings and Kobe Steel increased on the optimism that steel demand and prices may recover in the fourth quarter.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 80.14 or 0.76% to 10,597.33, Hang Seng index in Hong Kong increased 32.03 or 0.15% to 20,893.33 and CSI 300 index in China lower 96.36 or 2.80% to 3,344.46. ASX 200 index in Australia increased 25.10 or 0.57% to 4,461.00. The FTSE Bursa KL Composite index in Malaysia closed higher 2.38 or 0.20% to 1,188.57.

The Kospi Index in South Korea increased 26.77 or 1.71% to close at 1,591.41. SET index in Thailand closed lower 1.43 or 0.22% to 654.25 and JSE Index in Indonesia decreased 9.62 or 0.40% to 2,386.86. The Sensex index in India decreased 106.86 or 0.69% to 15,411.63.

Nikkei 200 Average Movers

Yokohama Rubber Co Ltd led the decliners in the Nikkei 225 index of 3.3% followed by losses in T&D Holdings, Inc of 2.6%, in Fast Retailing Co Ltd of 2.6%, in Tokyo Dome Corp of 1.7% and in Shimizu Corp of 1.5%.

Hitachi Construction Machinery Co Ltd led gainers in the Nikkei 225 index with a rise of 8.3% followed by gains in Ebara Corp of 7.9%, in JTEKT Corp of 7.3% and Hino Motors Ltd of 7.0%.