Yen Strength Worries; Aeon $1.1 B Offering

Darlington Musarurwa
11 Nov, 2009
New York City

Investors in Japan focused on rising yen. Exporters were among the leading decliners. Japan machinery orders rise 6% in September and increased 10.5% after adjusting for volatile orders. The retailer Aeon Company Ltd decreased 5% as it plans to sell $1.1 billion of bonds and repay short term debt.

[R]5:00 AM New York, 7:00 PM Tokyo – Investors in Japan focused on rising yen. Exporters were among the leading decliners. Japan machinery orders rise 6% in September and increased 10.5% after adjusting for volatile orders. The retailer Aeon Company Ltd decreased 5% as it plans to raise $1.1 billion and repay short term debt.[/R]

Japan stocks rose fractionally after markets digested machinery orders increase in September and strengthening yen.

The U.S. dollar dropped to 89.29 yen.

In Tokyo trading Nikkei 225 Index rose 0.01% or 0.95 to 9,871.68.

In the first section of the Tokyo Stock Exchange 16.9 billion shares worth 1.1 trillion yen were traded and in the second section 483 million shares worth 5.3 billion yen changed hands.

Of the Nikkei 225 index stocks, 84 gained, 115 declined, and 26 were unchanged. Pioneer Corp. led advancers in the index shares with a rise of 8.8% followed by Trend Micro Inc increasing 5.8%.

Japan Machinery Orders Rise

Japan’s cabinet office reported today the total value of machinery orders received by 280 manufacturers operating in Japan rose 6% in September from a decline of 1.9% the previous month.

In July-September period it rose by 10.4% compared with the previous quarter and orders are projected to fall 1.1% in the three months to December.

According to the report, private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, advanced 10.5% in September from a rise of 0.5% in August.

Private sector orders declined 0.9% in the September quarter and are forecasted to gain 1% in the October to December period.

Manufacturing orders dropped 0.1% in September from a rise of 4.9% the previous month. In the October to December period, manufacturing orders are expected to rise 0.4%.

In addition, non-manufacturing orders advanced 18% in September from a drop of 0.6% the previous month and rose 4.9% in the July to September period.

Non-manufacturing orders are forecasted to rise 1.3% in the December quarter.

Government orders declined 17% in September from a decline of 7.2% in August and orders are expected to drop 10.8% in October to December.

Domestic Cellphone Shipment Rise 4.5%

Nikkei News reported the Japan Electronics and Information Technology Industries Association said today domestic shipments of handsets climbed 4.5% to 2.41 million units in September.

Shipments rose for the first time in 15 months.

Domestic shipments however dropped 23.3% to 15.15 million units in the fiscal first half 2009.

Gainers& Losers

Pioneer Corp. led advancers in the Nikkei 225 index shares with a rise of 8.8% followed by gains in Trend Micro Inc. of 5.8%, in Taiheiyo Cement of 5.6%, in Japan Airlines Ltd. of 4.8%, and Nippon Telegraph of 4.5%.

Dowa Holdings led decliners in the Nikkei 225 index shares with a fall of 6% followed by losses in Pac Metals of 5.5%, in Aeon Co. Ltd. of 5%, in Isuzu Motors of 4.3%, and Sumco Corp of 3.9%.

Other Movers

The retailer, Aeon Company Ltd declined 5% to 736 yen after it plans to raise 100 billion yen to repay short term debt.

Nippon Yusen KK is expected to raise 150 billion yen in a public offering that may dilute current shareholders by 30%. The news was first reported by Nikkei News. Ahead of the news the shipping liner closed unchanged at 327 yen.

Dowa Holdings plunged 6% to 503 yen after the smelter reported first half net income decline of 65%.

Pacific Metals Company slumped 5.5% to 641 yen after it reported quarterly net plunged 72% to 3 billion yen from 10 billion yen on the revenue decline to 26.11 billion yen from 49.82 billion yen.

Japan Airport Terminal Company, Ltd declined 2.3% to 1,188 yen after it reported 45% decline in first half profit to 1.29 billion yen on sales decline of 12.8% to 60.22 billion yen. Earnings per share fell 45.3% in the period to 13.76 yen.

The airline terminal operator forecasted full year earnings to fall 36.4% to 2.2 billion yen and sales to declined 8.2% to 121.50 billion yen.