Japanese Shares Slip on Lower Shipping Rates, Deflation Concern
March 10, 2010, 2:07 AM ESTBy Masaki Kondo and Satoshi Kawano
March 10 (Bloomberg) -- Japanese shares fell after a gauge of commodity-transport fees dropped and a central bank report stoked concern deflation will hurt company earnings.
Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest shipping line, lost 2.3 percent. Softbank Corp., the nation’s No. 3 mobile-phone carrier, fell 1.6 percent. Casio Computer Co., the world’s biggest maker of calculators, climbed 3.4 percent after a newspaper reported it will swing to profit. Nisshin Steel Co. surged 6.9 percent ahead of its inclusion in the Nikkei 225 Stock Average.
The Topix index lost 0.2 percent to close at 922.44, with five stocks declining for every three that advanced. The Nikkei 225 fell 3.7 points to 10,563.92 in Tokyo. Settlement prices for Nikkei 225 futures and options expiring this month will be calculated on March 12.
“Investors usually prefer to stay on the sideline before a settlement day, and a lack of catalysts also discouraged people from trading today,” said Koji Toda, Tokyo-based chief fund manager at Resona Bank Ltd., which oversees about $55 billion in assets. “With no end of deflation in sight, investors are in no mood to buy shares of Japanese companies that depend on domestic demand.”
The gauge moved in the narrowest range today since Dec. 21 with the high and low no more than 41 points apart. The daily value of stock trading in Tokyo dropped 26 percent from the 12- month average. Today marks the one-year anniversary of the Nikkei 225’s lowest close since October 1982. The measure has since risen 50 percent as governments globally bolstered their economies through increased spending.
‘Few Clues’
The yen traded at 90.07 per dollar today. Canon Inc. bases its 2010 forecast on the assumption the yen will average 90 this year. Sony Corp. expects the currency to trade at 90 in the quarter to March 31. A stronger yen reduces the value of overseas sales at Japanese companies when converted into their local currency.
“The current exchange rate is in line with companies’ projections, leaving few clues how fast earnings will improve,” said Yoshihiro Ito, a senior strategist at Tokyo-based Okasan Asset Management Co., which oversees about $8.3 billion.
Kawasaki Kisen, Japan’s No. 3 shipping line, dropped 2.3 percent to 347 yen, and bigger rival Mitsui O.S.K. Lines Ltd. lost 1.3 percent to 609 yen. Shipping lines collectively posted the steepest drop among the Topix’s 33 industry groups.
The Baltic Dry Index, a measure of shipping costs for commodities, lost 1.5 percent yesterday, its first drop in nine days.
Softbank, Japan’s No. 3 mobile-phone carrier that exempts newly subscribed student customers from monthly base fees for three years, dropped 1.6 percent to 2,242 yen. Bigger rival KDDI Corp. declined 1.5 percent to 470,500 yen.
Casio, Nintendo
Japan’s producer prices, the costs companies pay for energy and unfinished goods, dropped 1.5 percent year-on-year in February, the 14th month of declines, the Bank of Japan said today.
“The economy’s recovery only started last year and it will take time for the improvement to spread” and increase companies’ pricing power, Azusa Kato, an economist at BNP Paribas SA in Tokyo, said before the report.
Casio jumped 3.4 percent to 721 yen, extending its gains to a fourth day. The company may post 20 billion yen ($222 million) in operating profit next fiscal year, compared with a loss in the 12 months to March, the Nikkei reported, citing President Kazuo Kashio.
Nisshin Steel jumped 6.9 percent to 186 yen, the highest close since Sept. 10. The stock will be added to the Nikkei 225 on March 29, Nikkei Inc. said yesterday.
Nintendo Co., the world’s biggest maker of handheld game players, rose 1.7 percent to 27,500 yen in Osaka trading, the highest close since April 16. The company’s dividend yield stands at 3.8 percent based on the payouts in the past 12 months.
“Overseas investors are buying internationally competitive companies, such as Nintendo,” said Masahiko Sato, an equity- market analyst at Nomura Holdings Inc. “As the end of this fiscal year is drawing near, Nintendo’s relatively high dividend yield stands out among high-tech companies.”
--With assistance from Mayumi Otsuma and Aki Ito in Tokyo. Editors: Sam Waite, Nicolas Johnson.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Satoshi Kawano in Tokyo skawano1@bloomberg.net.
To contact the editor responsible for this story: Nicolas Johnson at nicojohnson@bloomberg.net.
