Japan Steel Production Plunges; Casio Drops 9%

Darlington Musarurwa
19 Oct, 2009
New York City

Stocks in Japan closed lower ahead of earnings season. Casio Computer reversed its earlier forecast of annual profit to a net loss of 7 billion. The index of demand for services increased 0.3% in August. Steel output fell 29.6% in the first half to the lowest level last seen in 1969.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan closed lower ahead of earnings season. Casio Computer reversed its earlier forecast of annual profit to a net loss of 7 billion. The index of demand for services increased 0.3% in August. Steel output fell 29.6% in the first half to the lowest level last seen in 1969.[/R]

Japan market averages fell despite news that the country demand for services rose in August and a government report indicating production is recovering in all the nine regions.

In Tokyo trading Nikkei 225 Stock Average decreased 0.2% or 21.15 to 10,236.51, and the broader Topix Index advanced 0.5% to 905.80.

In the first section of the Tokyo Stock Exchange 8.8 billion shares worth 546 billion yen were traded and in the second section 67 million shares valued at 1 billion yen changed hands.

Of the Nikkei 225 index stocks 107 rose, 101 fell, and 17 were unchanged. Sapporo Holdings led gainers in the index shares with a rise of 5.8%.

Japan’s Demand for Services Rise 0.3% in August

Japan’s Ministry of Economy Trade and Industry said today the indices of Tertiary Industry Activity, which measure demand for services, rose 0.3% to 97.1 in seasonally adjusted terms.

Of the subs sectors in the index, scientific research, professional and technical services increased by 5.9%; finance and insurance by 1.9%; medical, health care and welfare by 0.7%; real estate and goods rental and leasing by 0.5%; transport and postal activities by 0.5%; learning support by 0.9% and compound services by 2.8%.

Wholesale and retail trade declined by 0.9%; miscellaneous services by 2.4%; information and communications by 1.4%; accommodations, eating and drinking services by 2%; electricity, gas, heat supply and water by 0.9% and living-related and personal services and amusement services by 0.1 %.

Japan’s Economy Picking Up

Bank of Japan said today in a regional economic report each of the country’s nine regions are showing signs of economic growth though regional differences remain. All of the regions revised their assessments.

Private consumption remain weak in all regions, dragged by sales at large retail stores and weak travel and leisure expenses, while business fixed investment dropped as corporate profits remain weak.

The report also notes that production picked up led by electronic parts and devices industry, transportation equipment, chemicals and iron and steel.

In addition, the BoJ assessment indicates that the employment situation continues to deteriorate. Household income has continued to drop on the decline in cash earnings for wage earners.

Japan’s H1 Steel Output Falls 29.6%

Nikkei News reported today that Japan’s crude steel output declined 29.6% year on year to 43.3 million tons in the six months ended September, dropping to the lowest since the first half of 1969.

Gainers & Losers

Japan Airlines soared 12% after the Yomiuri Shimbun reported that the airline will be bailed out by the government. The terms of the bailout were not reported but it appears that shareholders may not face dilution if the government provides any emergency funding.

Casio Computer Company dropped 9% to 692 yen after the company forecasted annual loss of 7 billion yen compared to previous estimate of 5 billion of profit.

Fast Retailing declined 3.7% to 14,750 yen after JP Morgan Chase lowered its outlook to “underweight” from “neutral” on the account of the recent price run up.

Real estate trusts gained on the expectations of higher land prices as the economy rebounds. Nippon Accomodations Fund surged 7% to 490,000 yen after it planned to raise as much as 21.4 billion yen through new stock sale to acquire properties.

Mitsui Fudosan increased 4.6% to 1,643 yen, Sumitomo Realty increased 3.5% to 1,781 yen and Nomura Real Estate increased 4.3% to 1,582 yen.

Yaskawa Electric Corporation, the maker of motion control and robots declined 1.7% to 741 yen after the company reported first half net loss of 6.3 billion yen, in addition to the loss of 4.8 billion yen loss in the second quarter ending in June.

Nikkei 200 Average Movers

Casio Computer Co., Ltd led the decliners in the Nikkei 225 index of 8.9% followed by losses in Mitsumi Electric Co., Ltd. of 5.1%, in Japan Airlines Corporation of 5.0%, in Fast Retailing Co., Ltd of 3.7% and in Nippon Sheet Glass Company, Limited of 2.9%.

Sapporo Holdings Limited led gainers in the Nikkei 225 index with a rise of 5.7% followed by gains Alps Electric Co., Ltd of 4.9%, in Dowa Holdings Co., Ltd of 4.9% and in Mitsui Chemicals, Inc. of 4.7%.