Shippers Decline in Japan; Honda Net Down 56%

123jump.com Staff
27 Oct, 2009
New York City

Japan raises economic assessment on regional economies. Stocks in Japan fell on weak commodities prices in weak trading in Asia. Honda quarterly profit declined 56% but maintained the outlook. Shippers declined after Kawasaki Kisen dropped after it increased its net loss forecast more than two fold.

[R]5:00 AM New York, 7:00 PM Tokyo - Japan raises economic assessment on regional economies. Stocks in Japan fell on weak commodities prices and markets in Asia closed lower. Honda Q2 profit declines 56% but maintains outlook. Shipping companies declined after Kawasaki Kisen dropped after it increased its net loss forecast more than two fold.[/R]

Japan stock indexes fell 1.5% dragged by commodity stock as metal and energy prices dropped. Gold prices decreased 1.3% to $1,042 per ounce and crude oil prices slipped 2.3% to $78.7 per barrel.

Shipping lines also declined on widespread profit downgrades in the sector.

Investors were also rattled by news Honda’s profit contracted 56% in the September quarter. Toyota Motor Corp. and Nissan Motor Co. are due to announce their earnings next week.

In Tokyo trading Nikkei 225 Index fell 1.5% or 150.16 to 10,212.46, and the broader Topix Index dropped 1.7% or 15.24 to 895.48.

In the first section of the Tokyo Stock Exchange 9.2 billion shares were traded and in the second section 132 million shares valued at 1.7 billion yen changed hands.

Of the Nikkei 225 index stocks, 31 rose, 187 fell, and 7 were unchanged. Chuo Mitsui Trust led gainers in the index shares with a rise of 7.9% on Nikkei News reports its merger with Sumitomo Trust & Banking will take place in early 2011.

Japan Raises Assessments on Regional Economy

The Japanese finance ministry today upwardly reviewed its assessment on seven of the 11 regions in the three months ended September 30 on resurgent demand.

However, the ministry maintained its assessment on four regions from the previous quarter.

Though the country’s economy is in a “severe state”, production is showing signs of picking up.

Japanese Unaware of New Debt Rule

Nikkei News reported today that a recent survey by the country’s Financial Services Association indicated that an estimated 60% of respondents with outstanding consumer debt were unaware of a new rule that limits the total amount of such loans to a third of a borrower’s annual income.

According to the report, among a subset of 1,000 people with outstanding consumer loans, 42.8% said they understand the new rule that are scheduled to begin in June next year.

In addition, the survey revealed that 50.2% of 4,064 respondents who owe money to consumer lenders will be unable to take out more loans under the new rule since their outstanding balances already exceed the maximum.

Honda Q2 Profit Drops 56%

Honda Motor Co. reported today net profit contracted 56% to 65.54 billion yen in the second quarter ended September on a strong yen from 148.85 billion yen in the previous quarter.

Net profit in the quarter fell to 54.04 billion yen from 123.32 billion in the comparable year ago period beating the estimate of 43.9 billion yen.

Sales dropped 27% to 2.05 trillion yen from 2.8 trillion yen in the previous three months.

Honda projected net profit for the full year ended March 2010 to rise to 155 billion yen from 55 billion yen earlier forecasted, while sale are expected to jump to 8.4 trillion yen from 8.2 trillion yen.

Gainers & Losers

Chuo Mitsui Trust gained 7.9% after the Nikkei News reported that the company may merge with Sumitomo Trust & Banking.

Sumitomo Trust & Banking increased 1.8% on the news.

Kawasaki Kisen dropped 6.4% after increasing its annual net loss forecast to 79 billion yen from 31 billion yen. Nippon Yusen K.K. plunged 2.5% and Mitsui OSK Lines dipped 2.5%.

Commodity stocks declined. Pac Metals tumbled 6.1%, Mitsubishi Corp. fell 5.5% and Nippon Oil declined 4.4%.


Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 150.16 or 1.45% to 10,212.46, Hang Seng index in Hong Kong decreased 420.14 or 1.86% to 22,169.59, and CSI 300 index in China lower 99.52 or 2.91% to 3,314.72. ASX 200 index in Australia decreased 76.80 or 1.59% to 4,753.50. The FTSE Bursa KL Composite index in Malaysia was higher 0.38 or 0.03% to 1,260.30.

The Kospi Index in South Korea decreased 7.58 or 0.46% to close at 1,649.53, SET index in Thailand closed higher 2.71 or 0.38% to 714.54. JSE Index in Indonesia decreased 42.51 or 1.72% to 2,425.20. The Sensex index in India decreased 387.10 or 2.31% to 16,352.40.