Tokyo: Machinery Orders, Producer Prices Decline

Darlington Musarurwa
10 Mar, 2010
New York City

Stocks in Japan struggle after wholesale prices declined for the fourteenth month in a row. Machinery orders index, the measure of business investment and future outlook declined 3.7% in January after surging 20% in December. Beer shipments decline 6.3% in February.

[R]5:00 AM New York, 7:00 PM Tokyo- Stocks in Japan struggle after wholesale prices declined for the fourteenth month in a row. Machinery orders index, the measure of business investment and future outlook declined 3.7% in January after surging 20% in December. Beer shipments decline 6.3% in February.[/R]

The benchmark stock index in Tokyo fell 0.04% on the persistent worries of falling prices and volatile freight rates. The freight rate index declined after rising for more than two weeks.

In Tokyo trading Nikkei Stock Average decreased 0.04% or 3.73 to 10,563.92, and the broader Topix Index dropped 0.2% to 922.44.

In the first section of the Tokyo Stock Exchange 7.7 billion shares worth 487 billion yen were traded and in the second section 94 million shares valued at 1.7 billion yen changed hands.

Of the Nikkei 225 index stocks, 90 gained, 119 fell and 16 were unchanged. Nippon Light Metal led gainers in the index shares with a rise of 10.1% followed by Okuma Corp. advancing 5.3%.

Producer prices fell 1.5% in February from a year ago month, and the index of wholesale inflation declined for the fourteenth month in a row.

Machinery Orders Drop 3.7% in Jan

Japan’s Cabinet Office said today the total value of machinery orders received by 280 manufacturers operating in Japan in January fell 3.7% from December to 1.9 trillion yen, but rose 7.8% to 5.4 trillion yen in the three months to December.

Machinery orders are a signal to business investments and outlook for the business in the future.

Total machinery orders are projected to drop 1.9% to 5.3 trillion yen in the quarter ending in March.

Private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, declined 3.7% to 723.8 billion yen in January, while orders climbed 0.5% to 2.1 trillion yen in the October-December period.

Private sector machinery orders are estimated to jump 2% to 2.1 trillion yen.

The Cabinet Office also notes that manufacturing orders climbed 3.3% to 290.7 billion yen in January and jumped 17.8% to 815.5 billion yen in the October to December period, while orders are forecasted to edge up 2.3% to 834 billion yen in the three months to March.

Non-manufacturing orders decreased 12.9% to 407.8 billion yen in January and fell 8.4% to 1.27 trillion yen in the December quarter. However, orders are projected to increase 3.5% to 1.32 trillion yen.

Government orders advanced 20.8% to 266 billion yen in January from the previous month, but fell 21.8% to 659.1 billion yen in the December quarter. Orders are expected to recover 2.6% to 676 billion yen in the March quarter.

Beer Shipments Decline 6.3%

Japan Today reported that domestic shipments of beer and beer-like drinks fell 6.3% to 29.25 million cases in February, dropping the most since 1992.

Regular beer shipments plunged 7.7%, shipments of low-malt “happoshu” fell 16.2%. Shipments of beer-like alcoholic drinks however rose 3.7%.

Corp Goods Prices Falls 1.5% in February

Bank of Japan reported today that the Corporate Goods Price Index fell 1.5% to 102.5 in February, falling for the 14th times in a row. The index rose 0.1% on a month-on-month basis.

Nikkei Movers

Sumco Corp led the decliners in the Nikkei 225 Stock Average with a loss of 3.4% followed by losses in The Chiba Bank, Ltd of 3.4%, in Unitika Ltd of 2.7%, in Kawasaki Kisen Kaisha, Ltd 2.5% and in Fukuoka Financial Group, Inc 2.3%.

Nippon Light Metal Company, Ltd led gainers in the Nikkei 225 Stock Average with a rise of 10.0% followed by gains in Okuma Corp 6.1%, in Nitto Boseki Co of 4.8% and in Fuji Electric Holdings Co., Ltd 4.2%.

Other Movers

ANDO Corporation increased 7.3% to 131.00 yen after the construction and real estate businesses interest-bearing debt may fall 15% to just under 40 billion yen ($444 million) as of the end of this month, the lowest level in 19 years, the Nikkei newspaper reported.

Casio Computer Co the electronics maker rose 3.7% to 724.00 yen.

CFS Corporation closed unchanged at 441.00 yen after the retailer Aeon Co., Ltd., an operator of general merchandise stores, is planning to acquire an additional 18% stake in the company.

CSK Holdings Corporation the information technology services provider rose 2.2% to 408 yen.

Fujibo Holdings, Inc the fiber maker increased 5.3% to 157 yen.

Megane Top Co decreased 3.4% to 614.00 yen after the eyeglass retailer was downgraded to “neutral” from “buy” at Daiwa Securities Group Inc.

Nippon Light Metal Company, Ltd increased 9.1% to 119.00 yen after the aluminum producer was upgraded to “buy” from “neutral” at UBS AG.

Tamura Corp gained 7.6% to 295.00 yen after the electronic components maker was upgraded to “strong outperform” from “outperform” at Mitsubishi UFJ Financial Group Inc.