Japan Steel Works Surges; Automakers Lag

Darlington Musarurwa
04 Nov, 2009
New York City

Japanese automakers reported a rise in U.S. sales in October but lagged the gains of Korean makers. Japan is expected to keep stricter lending rules and maintain accommodative monetary policy. Japan Steel Works surged on estimating annual profit compared to a loss a year ago.

[R]5:00 AM New York, 7:00 PM Tokyo – Japanese automakers reported a rise in U.S. sales in October but lagged the gains of Korean makers. Japan is expected to keep stricter lending rules and maintain accommodative monetary policy. Japan Steel Works surged on estimating annual profit compared to a loss a year ago.[/R]

Japanese market averages rose marginally driven by rising commodity prices and optimism that U.S. automobile sales are recovering.

In Tokyo trading Nikkei 225 Index rose 0.4% or 41.36 to 9,844.31 and the broader Topix Index increased 0.1% to 881.27.

In the first section of the Tokyo Stock Exchange 7.8 billion shares worth 571 billion yen were traded and in the second section 717 million shares valued at 5.2 billion yen changed hands.

Of the Nikkei 225 index stocks, 114 rose, 93 declined, and 13 were unchanged. Furukawa Co. Ltd. led gainers in the index shares with a rise of 11.1%.

Automakers’ US Sales Drop in October

Autodata Corp. reported today Japan automakers’ U.S. sales dropped and lagged behind Korean and U.S. car makers.

Toyota Motor sales remained unchanged at 152,165 units from 152,101 units in the same period a year earlier, while Honda’s sales declined 0.4% to 85,502 units compared with 85,864 units a year ago.

Mitsubishi Motors sales dropped 48.3% to 8,867 from 7,486 and Mazda Motor of America tumbled 8.4% to 15,068 units from 16,442 units in the same period a year earlier.

However, sales for Nissan North America gained 5.6% to 60,115 units from 56,945 a year earlier.

Hyundai sales in the period under review jumped 49% to 31,005 units from 20,820 units, while Kia Motors America’s sales climbed 45.3% to 22,490 from 15,483 a year ago.

U.S. automakers also improved with General Motors Corp. sales rising 4.7% to 176,632 units from 168,719 units in October last year.

Sales for Ford Motor Company gained 3.3% to 136,583 from 132,248 a year earlier.

Japan to Continue with Stricter Lending Rules

Nikkei News reported that Japan’s Financial Affairs Minister Shizuka Kamei said today the government will forge ahead with the introduction of stricter new rules for consumer finance companies.

“The planned new restrictions on interest rates and caps for unsecured loans will be altered,” said Kamei.

Japan to Keep Accommodative Policy

Separately, Nikkei News reported that Bank of Japan Governor Masaaki Shirakawa said today at an economic forum hosted by Kyodo News the central bank will keep an maintain its extremely accommodative monetary policy.

He also noted that the downside risks to the economy are being reduced by growth in emerging economies.

Gainers & Losers

Financial stocks dropped after worries over the health of the global financial environment. Sumitomo Trust & Banking fell 2.9%, Shinsei Bank dropped 4%, Mizuho Financial declined 2.2% and Mitsubishi UFJ Financial Group plunged 1.8%.

Japan Steel Works Ltd surged 10% to ¥1,096 after the steelmaker lifted its annual earnings outlook and Kobe Steel advanced 3.1%.

Fujikura Ltd increased 5.3% to ¥454 after it estimated net profit of ¥4 billion for the year compared to a loss of ¥4 billion loss a year ago.

Trading companies advanced after gold and precious metals increased. Marubeni Corp increased 3.2% to ¥454 and Mitsui & Company decreased 0.1% to ¥1,184.

Sumitomo Metal Mining increased 2.6% to ¥1,476.

Earnings Review

Inpex Corporation, the energy explorer increased 0.3% to ¥756,000, and said first-half sales fell 47% to ¥392.6 billion from ¥741.5 billion a year ago. Net profit for the first-half fell 54% to ¥47.6 billion or ¥20,244.57 per diluted share compared to net profit of ¥104.0 billion or ¥44,155.91 per share a year ago.

Mitsui & Co., Ltd., the trading company said first-half revenues fell 40% to ¥2.0 trillion from ¥3.33 trillion a year ago. Net profit for the first-half fell 70% to ¥72.8 billion or ¥39.91 per diluted share compared to net profit of ¥240.5 billion or ¥131.79 per share a year ago.

Nissan Motor Co., an automobile manufacturer said first-half revenues fell 30.6% to ¥3.38 trillion from ¥4.87 trillion a year ago. Net profit for the first-half fell 93% to ¥9 billion or ¥2.21 per diluted share compared to net profit of ¥126.34 billion or ¥31.02 per share a year ago.