Japanese Carmakers Rise Despite New Recalls, Nikkei Up
Car safety issues hit the news again today in Japan as both Toyota and Honda brace for more recalls. Just as Toyota's recall woes seemed to be fading into the past, the company has taken it upon itself to announce the discovery of widespread brake fluid and fuel pump problems and recall 1.5 million Lexus and Toyota models. Is this a new face of Toyota, promptly handling defective vehicles instead of brushing them aside to protect its bottom line? Some say not, since these problems have been cropping up since 2005, according to Japan Today. Toyota may have learned its lesson after getting slapped with a $16.4 million fine for its delay in reporting the sudden acceleration problems that sorely tested the company's reputation.
Meanwhile, Honda plans to recall around 4,000 vehicles with the same brake fluid problem. The brands affected are Honda's Odyssey minvans and Acura luxury sedans. Today Toyota shares climbed 0.9% and Honda dipped 1%. Other Japanese car makers also advanced after a drop in U.S. jobless claims, along with a weakening yen, bolstered investor confidence. Fuji Heavy Industries, the maker of the all-wheel drive Subaru, shot up 1.5%, Mazda rose 1.4% and Isuzu gained 1%.
Other Japanese exporters also rose with Panasonic surging 1.9%, Canon gaining 1.6% and Sony up 1%. Advantest, a producer of semiconductor testing devices advanced 0.7%.
It was a good day for the shipping sector. Mitsui O.S.K. surged 2% and Nippon Yusen K.K. added 0.3% after raising earnings forecasts. Kawasaki Kisen Kaisha soared 1.9%.
Financial firms and banks advanced in Tokyo as investors put aside fears that G-20 talks could lead to further capital increases. Nomura climbed 2%, Resona Holdings rose 2.2% and Sumitomo Mitsui advanced 1.4%. Bank of Japan, meanwhile, sank 0.8%.
In Hong Kong, oil companies led the index lower. Sinopec tumbled 2.4% after reports of an explosion at one of its refineries injured seven workers, according to Bloomberg. Cnooc, an oil exploration company, declined 0.9% and PetroChina slipped 0.7%.
Raw materials producers also declined with Jiangxi Copper falling 2.7% and Zhaojin Mining Industry dipping 1%. Maanshan Iron & Steel plunged 4.3% on news of falling profits.
In China banks were a drag on the index as investors feared that the fast-paced rise in inflation could spur the government to continue raising interest rates. Bank of China dived 1.4%, Agricultural Bank of China and China Minsheng Bank both slumped 1.1%, Industrial & Commercial Bank of China sank 0.7% and Bank of Communications dipped 0.3%.
Meanwhile, weathermen played their part by predicting a sudden fall in temperatures, sparking a coal-company buying spree. Coal is still the most common source of energy in China. Datong Coal motored up 3.8% and China Coal Energy rose 1.5%. Appliance makers also advanced with Qingdao Haier, known for making refrigerators and water heaters, surging 5.5% and Midea, which makes everything from rice cookers to space heaters, climbing 3.3%. With weekend temperatures forecast to drop below freezing in northern locations like Harbin, keeping warm will be on everyone's mind.