Japan Stocks Gain on Machine Tools Orders

Darlington Musarurwa
14 Jan, 2010
New York City

Stocks in Japan rose after machine tools orders surged for the first time in eighteen months in December but broader machinery orders declined. Shipping companies surged on the reports that Mitusi OSK will report pre-tax profit of 11 billion yen. Softbank Corp gained.

[R]5:00 AM New York, 7:00 PM Tokyo – Stocks in Japan rose after machine tools orders surged for the first time in eighteen months in December but broader machinery orders declined. Shipping companies surged on the reports that Mitusi OSK will report pre-tax profit of 11 billion yen. Softbank Corp gained on the estimate that Google exit in China will help Alibaba where the company has a stake.[/R]

Stocks in Tokyo trading closed higher after the release of several economic assessments and data.

Machine tool orders increased but broader machinery orders declined. Shipping companies closed higher after Mitsui OSK reported an increase in profit. Financials gained on the expectations that the banks will be able to raise more capital.

In Tokyo trading Nikkei 225 Stock Average jumped 1.6% or 172.65 to 10,907.68, and the broader Topix Index increased 1.6% to 959.01. JAL traded more than 1 billion shares and retraced 14% to 8 yen and accounted 30% of total trading volume today.

In the first section of the Tokyo Stock Exchange 32.2 billion shares valued at 1.6 trillion yen were traded and in the second section 492 million shares valued at 4 billion yen changed hands.

Of the Nikkei 225 index stocks, 187 rose, 29 fell, and 9 were unchanged. Japan Airlines Corp. led gainers in the index shares with a rise of 28.6% followed by Okuma Corp. gaining 13.6%.

Japan GDP to Grow 1.8% in December Quarter

Nikkei News reported today that the ASP Forecast Survey showed Japan’s gross domestic product likely rose by an annualized 1.8% in the three months to December from 1.3% estimated in the December survey.

However, gross domestic product for the current fiscal year is expected to shrink 2.65% from the earlier estimate of 2.76% fall.

The report notes that economists estimate GDP will drop 0.69% in the January to March quarter, before rising 0.79% in first quarter ending in June 2011. In the September quarter GDP is projected to expand 1.5%.

In addition, the core consumer price index, which excludes fresh food prices, is expected to stage year-on-year declines in each quarter through first quarter ending in March 2012.

The core CPI is estimated to decrease 1.54% in fiscal 2009.

Tokyo Condominium Rents Rise 1.2% in November

Online edition Tokyo Kantei Co. noted condominium rents in Tokyo metropolitan area edged up 1.2% to 2,674 yen per square metre in December from a month ago.

According to the report, the figure doesn’t indicate a recovery, but a result of a decrease in the number of condos offered in Saitama and Chiba prefectures and an increase in those offered in Tokyo.

Condo rents in the Kinki region surrounding Osaka increased 4.3% to 1,663 yen, while those in Aichi and two other prefectures in central Japan advanced 0.9% to 1,562 yen.

Japan Machinery Orders Fall 8% in November

Japan’s cabinet office reported today the total value of machinery orders received by 280 manufacturers operating in Japan fell 8% to 1.6 trillion yen in November from the previous month.

Orders in the three months to September climbed 10.4% to 5 trillion yen and are expected to fall 1.1% to 5 trillion yen in the December quarter.

Private sector machinery orders, excluding volatile ones, fell 11.3% to 625 billion yen in November and decreased 0.4% to 2.1 trillion yen in the three months to September, but are projected to rise 1% to 2.1 trillion yen in the October- December period.

Manufacturing orders dropped 18.2% to 240 billion yen in the period and tumbled 8.7% to 693 billion yen in the July-September period. Manufacturing orders are projected to gain 0.4% to 695 billion yen in the December quarter.

Non-manufacturing orders tumbled 10.6% to 380 billion yen in the period and orders are forecasted to increase 4.9% to 1.4 trillion yen in the September quarter. Orders are expected to jump 1.3% to 1.41 trillion in the three months ended December.

Government orders soared 13.3% to 233 billion yen in November and climbed 11.4% to 842 billion yen in July to September, while orders are projected to tumble 10.8% to 751 billion yen in the December quarter.

Machine Tools Orders Grows

Machine tool orders increased 62.8% in December from a year ago according to the latest data from the Japan Machine Tool Builders’ Association.

The December month gain was the first monthly increase in eighteen months.

Gainers & Losers

Japan Airlines led gainers in the Nikkei 225 index stocks with a rise of 28.6% followed by increases in Okuma Corp. of 13.6%, in Softbank Corp. of 8.6%, in Nikon Corp. of 8.3%, and Kawasaki Kisen of 7.4%.

Fast Retailing led decliners in the Nikkei 225 index stocks with a fall of 1.5% followed by losses in Obayashi Corp. of 1.4%., in Konami Corp of 1.2%, in Taisei Corp. of 1.1% and UNY Ltd. of 1%.

Softbank Corp increased 8.6% to 2,370 yen after analysts speculated that the company may benefit from its holding in Alibaba Group Holding Ltd through Yahoo! Inc if Google.cn is closed.

Banks closed higher in trading on the expectations that rights offering or stake sale to life insurance companies will help banks to raise capital to meet international regulatory requirements.

Sumitomo Mitsui Financial Group Inc increased 3.3% to 2,898 yen and Mitsubishi UFJ Financial Group Inc increased 2.1% to 489 yen.

Mitsui O.S.K. Lines increased 7.2% to 623 yen after the Nikkei newspapers reported that the company in the quarter ending to December earned pre-tax profit of 10 billion yen on strong demand from emerging markets.

Nippon Yusen K.K. increased 5.1% 5o 352 yen.