Japan Manufacturing Expands; Steel Stocks Up

Darlington Musarurwa
28 Dec, 2009
New York City

Stocks in Japan and Asia traded higher on improved sentiment and sustained economic recovery in the region. Factory production in Japan increased for the ninth month in a row and the Japan estimated economic expansion in the next fiscal year of 1.4%. The steelmaker JFE Holdings said Asian demand is ahead of capacity.

[R]5:00 AM New York, 7:00 PM Tokyo – Stocks in Japan and Asia traded higher on improved sentiment and sustained economic recovery in the region. Factory production in Japan increased for the ninth month in a row and the Japan estimated economic expansion in the next fiscal year of 1.4%. The steelmaker JFE Holdings said Asian demand is ahead of capacity.[/R]

The benchmark stock index rose 1.4% in Japan after the Cabinet Office forecasted the economy is likely to expand 1.4% in the year starting April 2010.

Investors further cheered a government report showing industrial production advanced 2.6% in November.

In Tokyo trading Nikkei 225 Stock Average rose 1.4% or 139.52 to 10,634.43, and the broader Topix Index advanced 1.1% to 919.56.

In the first section of the Tokyo Stock Exchange 6.8 billion shares worth 420 billion yen were traded and in the second section 227 million shares valued at 1.6 billion yen changed hands.

Of the Nikkei 225 index stocks, 194 rose, 23 decreased, and 8 were unchanged. Konami Corp. led gainers in the index shares with a rise of 5.8% followed by Nippon Mining gaining 5.4%.

Japan’s Industrial Production Rises 2.6% in November

Japan’s Ministry of Industry Trade and Economy reported today the country’s industrial production rose 2.6% to 88.3 in November from the previous month, rising for the ninth straight month, but fell 3.9% from the same period a year ago.

Industries that spurred growth were transport equipment, general machinery and others in that order.

Commodities that contributed to the increase were small and large passenger cars, drive and transmission and control parts.

The METI noted in the Survey of Production Forecast in Manufacturing, production is projected to increase 3.4% in December and to rise 1.3% in January.

Industries that mainly contributed to the increase in December are iron and steel, electronic parts and devices and electrical machinery, in that order.

In addition, industries that mainly contributed to the increase in January were general machinery, transport equipment, information and communication electronics equipment, correspondingly.

Japan’s Commercial Sales Fall 14.6% in Nov

Separately, the METI said in the preliminary report of current survey of commerce that commercial sales dropped 14.6% to 40.7 trillion yen.

Wholesale sales fell 18.7% to 29.6 trillion yen, while retail sales declined 1% to 11 trillion yen.

Sales for large-scale retail stores decreased 9.6% to 1.6 trillion yen.

Nikkei Movers

Pioneer Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 3.1% followed by losses in Japan Tobacco Inc of 2.1%, in Showa Shell Sekiyu K.K of 1.9%, in Showa Denko K.K 1.6% and in Daiwa Securities Group Inc 1.4%.

Konami Corp led gainers in the Nikkei 225 Stock Average with a rise of 5.8% followed by gains in Nippon Mining Holdings Inc 5.4%, in CSK Holdings Corporation of 5.0% and in Nippon Oil Corporation of 4.8%.

Other Movers

Fuji Heavy Industries Ltd the automobile segment climbed 1.6% to ¥433.00.

Hitachi Construction Machinery Co., Ltd the maker of mining and construction machinery increased 2.5% to ¥2,430.00.

Japan Tobacco Inc fell 2.1% to ¥322,000.00.

JFE Holdings, Inc added 1.3% to ¥3,690.00 after the steelmaker said exports of high-end steel, like galvanized steel, for use in cars and electric appliances are ahead of expectations.

JFE said that demand from its Asian customers is ahead of its capacity and plans to restart one of its two idled blast furnaces in February.

Konami Corp the digital entertainment products maker gained 5.8% to ¥1,679.00.

Pioneer Corporation decreased 3.1% to ¥303.00 after the manufacturing and sale of electronic products said Monday it will postpone a third-party allotment of new shares to Honda Motor Co. for the third time as negotiations with other potential financial partners continue.

Toyota Motor Corporation advanced 0.2% to ¥3,860.00 and the carmaker said it is coping with the yen fluctuations and retain its competitive advantage.

Tokyo Electron Limited the maker of electronic products and components rose 2.3% to ¥6,020.00.