Tokyo Stocks Flat; Iron Ore Price Hike

Mayank Mehta
25 Mar, 2010
New York City

Prime Minister Yukio Hatoyama showed his willingness to discuss the increase in consumption pledge. He had focused his campaign on lowering taxes and eliminating wasteful spending. Steelmakers in Japan face as much as 100% hike in iron ore price from Brazil shipments.

[R]7:00 PM Tokyo – Prime Minister Yukio Hatoyama showed his willingness to discuss the increase in consumption pledge. He had focused his campaign on lowering taxes and eliminating wasteful spending. Steelmakers in Japan face as much as 100% hike in iron ore price from Brazil shipments.[/R]

Stocks in Tokyo trading were flat as the yen weakened and Greece was in the focus of investors. The leaders of EU nations are likely to offer a financial package to Greece that will involve the International Monetary Fund and direct loans from Germany an France.

In Tokyo trading Nikkei 225 Stock Average decreased 0.1% or 6.1 to 4,885.40, and the broader Topix Index rose 0.16 to 952.13.

In the first section of the Tokyo Stock Exchange 8.4 billion shares worth 566 billion yen were traded and in the second section 253 million shares valued at 3.2 billion yen changed hands.

Of the Nikkei 225 index stocks, 84 rose, 134 fell, and 7 were unchanged. Fanuc Ltd. led gainers in the index shares with a rise of 3.9% followed by Jtekt gaining 3.4%.

Iron Ore Prices to Double in June Quarter

Japan Today reported that the benchmark iron ore price for Japanese steelmakers is expected to double to a record $100 per ton in the June quarter as Brazil supplier Vale consider market price.

Japanese steelmakers earlier this month accepted a 55% hike from BHP Billiton, though they had fixed coking coal and iron ore import prices on a fiscal year basis.

Vale said this week it has introduced a more flexible iron ore pricing system for all customers and is expected to set prices on a quarterly basis that are more aligned with the spot prices.

Hotoyama Considers Consumption Tax Hike

Nikkei News reported that Japan’s Prime Minister Yukio Hatoyama said today in a session of the House of Councillor’s Health, Labour and Welfare that he is willing to hold talks on raising consumption tax.

Hatoyama has indicated that he will not raise sales tax during the current four-year term for House of Representatives lawmakers through 2013, but concentrate on cutting wasteful expenditure.

The government intends to offer 13,000 yen a month to every child of junior high school age or younger in fiscal 2010 from April 1 and make high school education free of tuition.

The Nikkei 225 Index in Tokyo closed higher 13.82 or 0.13% to 10,828.85 and of the stocks in Nikkei 225 Stock Average, 83 increased, 134 declined and 8 was unchanged.

Nikkei Movers

Kajima Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 4.5% followed by losses in All Nippon Airways Co., Ltd of 2.9%, in Marui Group Co Ltd of 2.7%, in Yahoo Japan Corporation 2.6% and in The Furukawa Electric Co., Ltd 2.6%.

Fanuc Ltd led gainers in the Nikkei 225 Stock Average with a rise of 3.9% followed by gains in Jtekt Corporation 3.3%, in T&D Holdings, Inc of 3.3% and in Toray Industries Inc 3.1%.

Other Movers

All Nippon Airways Co., Ltd decreased 2.9% to 262.00 yen and the carrier said it will stop carrying cargo to cut costs and rationalize its cost structure. Separately, Goldman Sachs lowered its rating on the carrier to “sell” from “neutral.”

Jtekt Corp climbed 3.3% to 1,038.00 yen after the auto-parts maker was upgraded “buy” in new coverage at MF Global Ltd.

Sanden Corp rose 0.8% to 352.00 yen after the maker of air conditioners announced that it has amended its year-end dividend forecast to 5 yen per share for the fiscal year ending March 2010.

Suzuki Motor Corp said its Maruti Suzuki India Ltd crossed 1 million vehicle production in the fiscal year ending in March, 30% higher than the previous year. Maruti Suzuki was launched in 1983 and the annual production increased to 500,000 in 2004 and since the launch the company has produced nearly 8.8 million vehicles in India.

Toyo Suisan Kaisha Ltd dropped 2.6% to 2,395.00 yen after the seafood company was downgraded to “neutral” from “outperform” at Credit Suisse Group.

Toray Industries Inc increased 3.1% to 530.00 yen after the maker of synthetic fiber plans to raise prices of carbon fiber by as much as 15% starting in April, as demand from aircraft and sporting goods makers recovers, the Nikkei newspaper reported.

The Yokohama Rubber Company, Limited rose 1.6% to 428.00 yen after the tiremaker announced that it has raised its full-year consolidated outlook for revenue from 465 yen billion to 470 billion yen.