Tokyo Stocks Edge Lower on Rising Yen

Darlington Musarurwa
18 Mar, 2010
New York City

Stocks in Tokyo declined after the yen strengthened against the dollar and euro. Canon, Nikon and Olympus decreased. Real estate developers closed lower after a broker lowered views on the sector.

[R]5:00 AM New York, 7:00 PM – Stocks in Tokyo declined after the yen strengthened against the dollar and euro. Canon, Nikon and Olympus decreased. Real estate developers closed lower after a broker lowered views on the sector.[/R]

Japan stock indexes fell after brokerage Morgan Stanley downgraded the country’s real estate sector, sparking a selloff.

Exporters fell as the yen appreciated near 123 yen on reports that Greece will engage the International Monetary Fund for assistance in order to escape the debt crisis.

In Tokyo trading Nikkei 225 Stock Average fell 1% or 102.95 to 10,744.03, and the broader Topix Index slipped 0.7% to 940.79.

In the first section of the Tokyo Stock Exchange 9.3 billion shares valued at 561 billion yen were traded and in the second section 118 million shares worth 2 billion yen changed hands.

Of the Nikkei 225 index stocks, 50 rose, 162 fell, and 13 were unchanged. Toho Zinc led gainers in the index shares with a rise of 5.3% as commodity stocks gained.

Japan Businesses Pessimistic on Conditions

Japan’s Ministry of Finance reported today that the quarterly business survey on business conditions fell to -2.4 in the January to March period compared to -1.9 a quarter earlier.

Business conditions are expected to ease to -1.6 in the June quarter.

Conditions for manufacturing industries with capital of 1 billion yen or over rose to 4.3 in the three months to March from 13.2 in the previous quarter, while business conditions for non-manufacturers in the same category decreased to -6.3% in the present quarter compared with -10.7 in the December quarter.

According to the finance ministry, sentiment for large corporations on domestic economic conditions eased to -5.8 in the three months to March from -8.8 in the previous quarter.

Large manufacturers expect domestic business conditions to rise 1.6 in the present quarter after jumping 6.1 in the three months ended December.

Profits for large companies are projected to increase 48.2% in the first half of 2010 and then slow to 21.5% in the second half.

In addition, profit for manufacturers is estimated to rise 210% in the first half before easing to 32.2% in the second half.

Japan’s Steel Production Rises 54% in February

Japan Iron and Steel Federation said today domestic crude steel production rose 54% to 8.43 million tons in February from the same period a year ago, rising the most since August 1950.

Industry estimates 100 million tons of steel production in 2010.

The domestic demand and strong exports to China and other Asian countries drove the surge in steel production.

Nikkei Movers

Nikon Corp led the decliners in the Nikkei 225 Stock Average with a loss of 4.1% followed by losses in Oki Electric Industry Company, Limited of 3.9%, in Mitsubishi Estate Company, Limited of 3.7%, in Taiyo Yuden Co., Ltd 3.7% and in Isuzu Motors Ltd 3.6%.

Toho Zinc Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 5.3% followed by gains in Sumitomo Corp 2.2%, in The Japan Steel Works Ltd of 1.9% and in Nippon Meat Packers Inc 1.8%.

Other Movers

Exporters fell on the strength in the yen. Toyota, Canon, Nikon and Olympus declined more than 2%.

Canon Inc fell 2.7% to 4,025.00 yen after the cameras, and optical and other products will likely post a near quadrupling of operating profit in the March quarter on strong sales of high-end digital cameras, the Nikkei newspaper reported.

Kenedix, Inc the investment service provider added 2.2% to 28,340.00 yen and the largest publicly traded real estate manager plans to launch two funds with 30 billion yen or $330 million. The company is in talks with pension funds in Tokyo and Korea

Mitsui Fudosan Co., Ltd the property companies decreased 2.3% to 1,613.00 yen.

Mitsubishi Estate Company, Limited dropped 3.7% to 1,476.00 yen after the company was downgraded their shares to “underweight” at Morgan Stanley.

Morgan Stanley lowered its view on the industry from “cautious” to “in-line.”

Seiko Epson Corp dropped 4.5% to 1,485.00 yen after the printer maker was downgraded to “underperform” from “neutral” at Credit Suisse Group AG.