Toyota Apologizes; Mitsubishi Heavy Net Drops

Darlington Musarurwa
05 Feb, 2010
New York City

Toyota Motor Corp President Akio Toyoda apologized for quality problems and set up a committee that will include outside experts to review quality processes. Japan

[R]5:00 AM New York, 7:00 PM Tokyo – Toyota Motor Corp President Akio Toyoda apologized for quality problems and set up a committee that will include outside experts to review quality processes. Japan’s foreign reserve assets soar to $1.05 trillion. Mitsubishi Heavy Industries profit drops 84.6%.[/R]

The Tokyo benchmark index dropped 2.9% after U.S. jobless claims increased and continued worries that Europe will struggle with the economic recovery as Spain, Greece and Portugal face high budget deficit.

The SovX credit default swap index, a measure of the credit risk of 15 Western European countries, increased to 94 basis points compared with 92 basis points for the benchmark US index of investment-grade companies.

The yen rose to 88.89 against one dollar after closing at 90.91 yesterday.

The market also got jitters from falling corporate earnings as Mitsubishi Heavy Industries reported profit declined in the nine months to December 31.

In Tokyo trading Nikkei 225 Stock Average decreased 2.9% or 288.89 to 10,057.09, dropping 1.4% for the week, and the broader Topix Index declined 2.1% or 20.51 to 891.78, decreasing 1% for the week.

In the first section of the Tokyo Stock Exchange 11 billion shares valued at 830 billion yen were traded and in the second section 186 million shares worth 2 billion yen changed hands.

Of the Nikkei 225 index stocks, 16 gained, 207 fell, and 2 were unchanged. Daikin Industries led gainers in the index shares with a rise of 6.2% followed by Yamaha Corp. increasing 6%.

Toyota Motor Corp President Akio Toyoda apologized in Japan and said that the company will help from external experts to review its quality processes. The company still predicts profit of 80 billion yen including the cost of 100 billion yen for the nearly 8 million vehicle recall program.

Toyota Motor increased 1.1% to 3,315 yen.

Coincident Index Rise to 97.6 in Dec

Japan’s Cabinet Office reported that the country’s coincident index, which gauges the health of the economy, increased to 97.6 in December from 96 a month ago, rising for the ninth straight month.

Economists had earlier forecasted the index to rise to 97.3.

The leading index, which measures economic conditions in three to six months, jumped to 94 in December from a revised 91 in November. Also the lagging index soared to 84.3 in December from 82.9 a month earlier.

Foreign Reserves Soar to $1.05 trillion

Ministry of Finance reported today that Japan’s foreign reserve assets rose $3.7 billion from the end of December to $1.05 trillion in January.

Foreign currency reserves were $1 trillion, International Monetary Fund reserve position stood at $4.2 billion, Special Drawing Rights were $20.8 billion, gold was $26.5 billion and other reserves were $406 million.

Mitsubishi Heavy Net Profit Falls 84.6%

Mitsubishi Heavy Industries reported today that the company’s net profit in the nine months to December fell 84.6% to 4.29 billion yen dragged by weakening demand.

Sales in the period dropped 16% to 2 trillion yen, while operating profit decreased 54.2% to 46.1 billion yen. Pretax profit tumbled 79.3% to 17.9 billion yen.

Asahi to Post 20 billion yen Profit

Asahi Glass said yesterday it might post a 20 billion profit in the fiscal year ended December as demand for LCD glass substrates recovers.

Sales declined 21% on the year to 1.14 trillion yen and operating profit is estimated to advance 48% from the September quarter to 47.2 billion yen. Exports of LCD glass substrates jumped 10% in the December quarter.

Full-year operating profit is estimated to rise to 86.5 billion yen from an earlier estimate of 72 billion yen.

Nikkei Movers

Daikin Industries Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 6.2% followed by losses in Yamaha Corporation of 5.9%, in Sumco Corporation of 5.9%, in Fuji Heavy Industries Ltd 5.8% and in Furukawa Co Ltd 5.6%.

Kuraray Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 5.5% followed by gains in Daichi Sankyo Co Ltd 4.2%, in Nippon Telegraph and Telephone Corporation of 3.6% and in Hitachi, Ltd of 3.2%.

Other Movers

Honda Motor Co., Ltd the automaker fell 3.7% to ¥3,100.00.

Kyocera Corporation fell 4.0% to ¥7,850.00.

Mazda Motor Corporation dropped 4.9% to ¥233.00 after the car exporter narrows loss forecast on rising China sales.

Mitsubishi Corporation slipped 3.2% to ¥2,118.00 after the prospect of slower economic recovery in the U.S. and Europe dragged stocks of trading companies.

Nissan Motor Co. fell 3.9% to ¥733.00.

Nintendo Co., Ltd the maker of video-game players dropped 4.1% to ¥24,340.00.

Panasonic Corporation decreased 3.0% to ¥1,392.00 after the electronic and electric products said net loss in the nine-month period to December was ¥14.61 billion compared to net profit of ¥65.38 billion a year ago.