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Market Update

Nikkei in Tokyo Struggles on Weak Core Machinery Orders


Author: Hiruki Nakamura
ticker.com
Last Update: 9:45 AM ET April 13 2015

4:30 PM Tokyo – Stocks in Tokyo edged lower after domestic core machinery orders in February declined and China reported worst trade data in nearly a year. Genky Stores, drug retailer, said nine-month net income doubled.

Stocks in Tokyo declined after a weeklong rally on the weaker than expected domestic machinery orders and China reported worst trade data in a year.

Seasonally adjusted core machine orders in February dropped 0.4% to 835.6 billion yen followed by 1.7% decline in January, the Cabinet Office said today.

On a yearly basis, core machine orders climbed 5.9% from 1.9% increase in the previous month.

In February, orders in manufacturing sector increased 0.9% to 355.2 billion yen but non-manufacturing orders slumped 3.6% to 476.9 billion yen.

Total orders, including domestic and exports, decreased 1.4% to 2,474.5 billion yen.

China’s customs agency said exports declined 15% in March and imports fell 12.7% on the rising yuan and slowing domestic demand.

The surprise contraction in China’s trade dragged March month surplus to $3.1 billion, sharply lower than the expected surplus of $45.4 billion.

Rising financing and labor cost eroded China’s manufacturing sector advantage and companies in Vietnam, India and other Asian countries begin to take bite out of various industries.

For the March quarter, exports increased 4.7% and imports plunged 17.6%.

The Nikkei 225 Stock Average edged down 2.17 to 19,905.46 and the broader Topix index slid 3.28 to 1,586.26.

The yen eased to close at 120.38 against a dollar.

Stocks in Review

Genky Stores, Inc gained 1.1% to 12,170 yen after the drugstores retailer said net sales in the nine-month period ending on March 20 climbed 8.4% to 46.01 billion yen from 42.44 billion yen in a year ago period.

Net income in the period soared 102.7% to 1.28 billion yen compared to 631 million yen and diluted earnings per share jumped to 363.66 yen from 180.76 yen in the same period a year ago.

The company forecasted net sales for the year ending in June to advance 9.6% to 63.50 billion yen and net income to surge 53.7% to 1.80 billion yen.

Japan Retail Fund Investment Corporation slipped 1.3% to 248,600 yen after the real estate developer reported net sales in the year ending in February jumped 6.2% to 31.40 billion yen from 29.56 billion yen in a year ago period.

Net income in the year climbed 10.9% to 10.66 billion yen compared to 9.61 billion yen in the same period a year ago.

Oriental Land Co., Ltd fell 0.4% to 8,855 yen after the Nikkei news reported theme parks and hotels operator’s sales for the year ending in March to jump 460 billion yen and profit to climb 110 billion yen as the total numbers of visitor in Tokyo Disney Resort increased 0.3% to a record 31.37 million a year.

Nippon Electric Glass Co., Ltd surged 17.7% to 665 yen after the cathode-ray and flat panel display maker forecasted net sales in the first-quarter ending in March to decline to 61 billion from previous estimate of 63 billion yen but operating income to climb to 4.50 billion yen compared to earlier guidance of 2 billion yen.

Yondoshi Holdings Inc climbed 4.9% to 2,516 yen after the apparel, accessories and bags retailer said net sales in the year ending in February increased 3.5% to 50.73 billion yen from 49 billion yen in a year ago period.

Net income in the period jumped 14.4% to 3.64 billion yen compared to 3.18 billion yen and diluted earnings per share climbed to 134.78 yen from 116.24 yen in the same period a year ago.

The retailer forecasted net sales for the first-half to rose 0.8% to 24 billion yen and net income to plunge 15.7% to 1.30 billion yen.

For the year, the company forecasted revenues to jump 3.5% to 52.50 billion yen and net income to soar 12.6% to 4.10 billion yen.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc