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Thursday, 29 January 2009
The picture gets messier in Japan
The slowdown in the world’s biggest economy is starting to bite in the world’s second-biggest, with Japanese companies having to cut profit forecasts, slash costs or reduce capacity.
The slowdown in the world’s biggest economy is starting to bite in the world’s second-biggest, with Japanese companies having to cut profit forecasts, slash costs or reduce capacity.
The world’s largest digital camera maker, Canon, reported an 81.5 per cent fall in December quarter profit to 35.8 billion yen (HK$3.11 billion) and forecast a bigger than expected decline this year.
Panasonic Corp, the world’s largest consumer-electronics maker, said it would stop operations at three plants overseas to cut costs.
It will shut a plant in Malaysia that makes film condensers and another in the Philippines that produces dry-cell batteries. It also plans to close a switch factory in Malaysia. It will lay off 490 workers in Malaysia and 60 in the Philippines.
The Nikkei business daily also said Panasonic was likely to report an annual net loss of about 100 billion yen on restructuring charges, weak demand for consumer electronics and the effects of a strong yen.
Yamaha Motor, the world’s second-largest motorcycle maker, yesterday said net profit plunged 98 per cent to 1.5 billion yen from 71.2 billion yen in 2007. Sales dropped 9 per cent to 1.6 trillion yen.
Yamaha said it would cut the salaries of its executives by 20 per cent from next month to December.
Hitachi Construction Machinery, the world’s largest maker of giant excavators, slashed its annual net profit forecast to 20 billion yen from an earlier estimate of 48 billion yen.
Hitachi joined rival Komatsu in forecasting steeper profit declines as the financial crisis spreads to emerging Asian nations, where the company expects growth to mitigate sales declines in the United States, Europe and Japan.
Sumitomo Mitsui Financial Group barely avoided its first net loss in almost four years, with group net profit for the quarter falling to 154 million yen from 148.9 billion yen a year earlier.
Although Tokyo’s largest lenders have so far avoided the massive credit losses that toppled US investment bank Lehman Brothers Holdings and threaten Citigroup, they have been hit hard by rising bad-loan costs and heavy losses on their stock portfolios.
On Tuesday, Nomura Holdings posted a record quarterly loss of 342.9 billion yen and said it would not pay a dividend for the fourth quarter.
A report from the finance ministry drove home the seriousness of the slowdown as it lowered its assessment of the regional economies for a fourth consecutive quarter.
“Regional economies are deteriorating all over the country,” the ministry’s local-office chiefs said in a quarterly report.
The world recession has caused record drops in exports and factory output and the central bank expects the slump to become the deepest since 1945.
The world’s second-largest economy will shrink 1.8 per cent in the year to March and 2 per cent the following year, the Bank of Japan forecast last week. Both projections would exceed a 1.5 per cent contraction in the year to March 1999, the sharpest since the second world war.
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The picture gets messier in Japan
Agencies in Tokyo
29 January 2009
The slowdown in the world’s biggest economy is starting to bite in the world’s second-biggest, with Japanese companies having to cut profit forecasts, slash costs or reduce capacity.
The world’s largest digital camera maker, Canon, reported an 81.5 per cent fall in December quarter profit to 35.8 billion yen (HK$3.11 billion) and forecast a bigger than expected decline this year.
Panasonic Corp, the world’s largest consumer-electronics maker, said it would stop operations at three plants overseas to cut costs.
It will shut a plant in Malaysia that makes film condensers and another in the Philippines that produces dry-cell batteries. It also plans to close a switch factory in Malaysia. It will lay off 490 workers in Malaysia and 60 in the Philippines.
The Nikkei business daily also said Panasonic was likely to report an annual net loss of about 100 billion yen on restructuring charges, weak demand for consumer electronics and the effects of a strong yen.
Yamaha Motor, the world’s second-largest motorcycle maker, yesterday said net profit plunged 98 per cent to 1.5 billion yen from 71.2 billion yen in 2007. Sales dropped 9 per cent to 1.6 trillion yen.
Yamaha said it would cut the salaries of its executives by 20 per cent from next month to December.
Hitachi Construction Machinery, the world’s largest maker of giant excavators, slashed its annual net profit forecast to 20 billion yen from an earlier estimate of 48 billion yen.
Hitachi joined rival Komatsu in forecasting steeper profit declines as the financial crisis spreads to emerging Asian nations, where the company expects growth to mitigate sales declines in the United States, Europe and Japan.
Sumitomo Mitsui Financial Group barely avoided its first net loss in almost four years, with group net profit for the quarter falling to 154 million yen from 148.9 billion yen a year earlier.
Although Tokyo’s largest lenders have so far avoided the massive credit losses that toppled US investment bank Lehman Brothers Holdings and threaten Citigroup, they have been hit hard by rising bad-loan costs and heavy losses on their stock portfolios.
On Tuesday, Nomura Holdings posted a record quarterly loss of 342.9 billion yen and said it would not pay a dividend for the fourth quarter.
A report from the finance ministry drove home the seriousness of the slowdown as it lowered its assessment of the regional economies for a fourth consecutive quarter.
“Regional economies are deteriorating all over the country,” the ministry’s local-office chiefs said in a quarterly report.
The world recession has caused record drops in exports and factory output and the central bank expects the slump to become the deepest since 1945.
The world’s second-largest economy will shrink 1.8 per cent in the year to March and 2 per cent the following year, the Bank of Japan forecast last week. Both projections would exceed a 1.5 per cent contraction in the year to March 1999, the sharpest since the second world war.
Reuters, Bloomberg
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