Nikkei flat; machine stocks gain but Toyota falls

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average was flat on Wednesday, with gains in machine stocks after better-than-expected machinery orders helping to offset a drop for recall-hit Toyota Motor Corp after an incident involving a Prius in the United States.

Japan’s core machinery orders fell 3.7 percent in January from the previous month, smaller than a median market forecast for a 4.1 percent fall, data released just before the start of trade showed.

“Investors took heart from the machinery data,” said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.

“The incident in America is taken as negative for Toyota as it has yet to completely resolve its recall problems,” she added.

Machinery shares such as machine tool maker Okuma Corp were also cheered by separate data from an industry body the previous day that showed machine tool orders rose more than 17 percent month-on-month in February to 64.8 billion yen, having more than tripled from the same month a year earlier.

“Orders related to machinery tools seem to be bottoming out, and while their levels are still low, they have recovered quite a lot,” said Hideyuki Ishiguro, a strategist at Okasan Securities.

The benchmark Nikkei dipped 0.04 percent or 3.73 points to 10,563.92.

The broader Topix fell 0.2 percent to 922.44.

Trading volume was subdued, with just 1.6 billion shares traded on the Tokyo exchange’s first section, well below last year’s daily average of 2.3 billion.

Declining stocks outnumbered advancing ones, 961 to 558.

Wednesday marks a year since the benchmark Nikkei posted a 26-year closing low of 7,054.98, from which it has now recovered about 50 percent as stimulus measures by governments around the world have helped economies to get on a recovery track. It hit a 26-year intraday low in October 2008 of 6,994.90.

Buying by foreign investors has also supported Japanese stocks since late last year and their buying has remained robust in 2010, with their net buying totaling 1.8 trillion yen so far this year, Ministry of Finance data showed.

“Money from overseas has been flowing into the Japanese market since late last year and that’s providing solid support,” said Hajime Nakajima, deputy general manager at Cosmo Securities.

“There’s a sense of comfort in stocks here because Japan is relatively risk-free. But given the global macro situation, including credit worries in Europe, it’ll take a while until investors actually place Japan above ‘neutral’ in their portfolios.”

TOYOTA FALLS

Toyota shares slipped 1.4 percent to 3,445 yen after news that it and U.S. safety regulators sent investigators to San Diego on Tuesday to inspect a Prius hybrid that sped out of control on a California freeway a day earlier.

The fall in Toyota’s shares also came after the carmaker said it would fix all 2000 to 2003 model Tundra pickups sold in the United States due to a risk that part of the truck’s frame could corrode, causing spare tires or the gasoline tank to fall off.

Other exporters gained, helped by a halt in the yen’s advance against the dollar. Investors fret about a stronger yen as it eats into exporters’ overseas profits when repatriated. The dollar was steady around 90 yen.

Sony Corp rose 1.4 percent to 3,375 yen and Canon Inc added 0.9 percent to 4,000 yen. Kyocera Corp gained 1.1 percent to 8,550 yen.

Stainless steel maker Nisshin Steel shot up 6.9 percent to 186 yen after news on Tuesday that it will be added to the Nikkei 225 on March 29.

Among machinery makers, machine tool maker Okuma Corp jumped 5.3 percent to 600 yen and Amada Co, a maker of metal-processing machines, rose 1.1 percent to 723 yen.

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(Additional reporting by Masayuki Kitano; Editing by Chris Gallagher)

Nikkei flat; machine stocks gain but Toyota falls