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Tokyo / Bloomberg
The death toll from earthquakes that struck southern Japan rose to 42 and the economic impact began to reverberate on Monday as companies surveyed damage and the potential effects on production from supply-chain disruptions.
The Topix index slumped 3 percent to 1,320.15 at the close in Tokyo, with all but one of its 33 industry groups falling, after rising last week by the most in two months. The Nikkei 225 Stock Average dropped 3.4 percent to 16,275.95.
Toyota loses $277mn,
halts production
Toyota Motor Corp. fell 4.8 percent, the most in two months. The company’s operating profit may be reduced by about 30 billion yen ($277 million) for the quarter ending in June because the earthquakes have disrupted parts supplies, Mitsubishi UFJ Morgan Stanley estimated in a report.
Halts in production that began late last week at Toyota’s Kyushu factories will extend to other assembly lines in stages throughout this week, Toyota said.
The yen strengthened to 108.23 per dollar as of 4:55 p.m. in Tokyo as a plunge in oil spurred a flight to haven assets. Investors also are speculating that Japan’s government and central bank will need to consider more stimulus for an economy that is already struggling.
Dai-Ichi Life Insurance Co. tumbled 5.6 percent, the most since Feb. 12, while Tokio Marine Holdings Inc. lost 5.9 percent. Other stocks fell on earthquake concerns with TDK Corp., which provides battery parts, down 5 percent. Kyushu Electric, which runs Japan’s only operating nuclear plants, was down 8 percent — the Sendai reactors in neighboring Kagoshima remain in operation, and Environment Minister Tamayo Marukawa said over the weekend that the plant doesn’t need to be shut down at this point. Taiheiyo Cement Corp. finished 2.7 percent higher on expectations that demand will rise with the rebuilding effort.
Other stocks affected included Japanese insurance companies, with MS&AD falling 7.3 percent and the Topix insurance index down 5.8 percent. H.I.S., which operates the Huis Ten Bosch theme park in Kyushu, fell 12 percent, and was the fifth biggest decliner on the Topix index.
Nomura said in a report that the focus for automakers is on whether disruption will occur in the supply of chips, saying that even if output is affected for several weeks it will quickly return to normal, minimizing the impact on this fiscal year’s earnings.
Abe, in parliament on Monday, said “we will take all necessary measures,†in response to a question about the possibility of an extra budget to
finance disaster relief measures.
Sony drops the most
in two months
Sony Corp. fell the most in more than two months on news that its camera-chip factory on the southern island of Kyushu remained offline. The Kumamoto plant, Sony’s main chip factory, typically operates 24 hours a day to make CMOS sensor chips, which turn light into digital signals — a key component in digital cameras and smartphones such as Apple Inc.’s iPhone. The stoppage hit Sony’s chip business at a time when demand is slowing and a stronger yen makes it harder to sell products abroad.
Companies in the region halted operations as they looked into the extent of the damage and sought to confirm the safety of their employees. Takeshi Hagiwara, a spokesman for Sony Semiconductor Manufacturing, said that all operations in the area have been suspended. He said it has been difficult to check damage to facilities because of the concern about further aftershocks. Sony has five plants in the area that produce image sensors, with the Kumamoto factory the primary facility.
Honda Motor Co. has suspended production at its motorcycle plant in Kumamoto through Monday. Nissan Motor Co. stopped output at its plant in Fukuoka after the latest quake as it assesses the impact on the facility and its supply chain.
Fujifilm Holdings Corp. halted production of electronic-display devices at its Kumamoto plant, according to spokesman Takahiro Taguchi. Nippon Steel & Sumitomo Metal Corp. has suspended some of its facilities in nearby Oita prefecture for safety checks.
Tens of thousands of homes in Kumamoto prefecture were still without power, according to the economy ministry.
Transportation to the region continued to be affected, with ANA and Japan Airlines canceling all Kumamoto-related flights on Monday, and most local trains not running. ANA and JAL said they would resume flights on Tuesday.