Nikkei flat; earnings support but Toyota slips

* Honda and Toyota slide on recall woes; resource stocks down

* Toyota to announce pedal fix plan in U.S. Monday

* Shares of companies with bullish earnings gain

By Aiko Hayashi

TOKYO, Feb 1 (BestGrowthStock) – Japan’s Nikkei average finished flat
on Monday as investors picked up shares of companies that
reported bullish earnings such as Mizuho Financial Group (8411.T: )
but sold resource shares on weaker commodity prices.

Toyota Motor Corp (7203.T: ), which has fallen almost 14
percent in the past week on its recall woes, slipped 1.2 percent
despite news that U.S. safety regulators are satisfied with its
plan for fixing an accelerator pedal problem. [D:nN30167915]

Eyes are on Toyota’s announcement of details of the plan at
6:30 a.m. Eastern time (1130 GMT), followed by a conference call
for media at 11 a.m. Eastern (1600 GMT), then its third-quarter
financial results on Thursday. [ID:nTKU105830]

Honda Motor Co (7267.T: ) also slid after announcing a large
global recall over a faulty window switch. [ID:nLDE60S0MD]

“A growing risk-averse mood is reflected in a weaker euro and
lower oil prices, and investors are trying to figure out the
direction for the stock market in that environment,” said
Kazuhiro Takahashi, general manager at Daiwa Securities Capital

“Investors have priced in good earnings, and even if
individual stocks are bought on positive earnings, they are not
strong enough buoy the overall market.”

The benchmark Nikkei (.N225: ) nudged up 6.98 points to end at
10,205.02 after falling as low as 10,129.91, its lowest since
Dec. 18.

The broader Topix (.TOPX: ) fell 0.3 percent to 898.61.

Concerns about the fiscal health of some of the smaller euro
zone countries including Greece and Portugal have pressured the
euro, while a tightening policy in emerging countries such as
India and China also weighed on investor sentiment, market
players said.

India’s central bank surprised markets by raising banks’ cash
reserve requirements by more than expected on Friday and warned
of mounting inflation, setting the stage for a rise in interest
rates in the coming months. [ID:nSGE60S0GY]

“Global exit strategies have started to appear from emerging
countries and investors are watching how that affects
international money flows,” said Fumiyuki Nakanishi, manager at
SMBC Friend Securities.

Some 2.2 billion shares changed hands on the Tokyo exchange’s
first section, steadily slowing after it marked its highest
volume in seven months above 3 billion shares last month.

Declining stocks outnumbered advancing ones by more than 2 to


Honda lost 2.5 percent to 2,999 yen and Toyota fell to 3,450

Market players said investors are worried the recalls could
hurt Toyota’s brand image and its long-term business prospects,
while some cited concerns about a possible cut in the automaker’s
earnings outlooks.

“There’s definitely concern about longer-term damage to the
image, as well as how far the damage might extend to parts makers
and so on. This could also affect Toyota’s overall
competitiveness,” said Hiroaki Osakabe, a fund manager at
Chibagin Asset Management.

Commodity markets ended January with their worst losses in
more than a year as a surge in the dollar and a weak demand
outlook caused prices to stumble after a strong run in 2009.

Trading houses lost ground, with Mitsui & Co (8031.T: ) falling
2.9 percent to 1,293 yen and Mitsubishi Corp (8058.T: ) shedding
2.2 percent to 2,140 yen.

Oil and gas field developer Inpex Corp (1605.T: ) slipped 1.4
percent to 651,000 yen after oil prices fell on Monday to extend
January’s loss, the worst in 13 months, on concerns about global
growth and sluggish oil demand. [O/R]

Shares of Toshiba Corp (6502.T: ), Japan’s biggest chipmaker,
sank 6 percent to 467 yen after it kept its outlook far below
market estimates and flagged belt-tightening measures after a
stronger yen and sliding PC prices hurt quarterly profit.

But shares of companies expecting strong earnings found

Mizuho gained 1.7 percent to 178 yen after Japan’s
second-largest bank said it returned to profit in the
October-December quarter, helped by a fall in bad loans and
smaller losses on its stock portfolio.

The bank also stuck to an annual profit forecast that is
above market consensus. [ID:nTOE60R09X]

Fanuc Ltd (6954.T: ) extended gains, jumping 4.4 percent to
9,040 yen, after the industrial robot maker raised its sales
forecast for the year to March during trading hours on Friday by
3.7 percent to 207.4 billion yen ($2.3 billion) thanks to an
increase in orders.

Shares of Toto Ltd (5332.T: ), Japan’s No.1 toilet maker, shot
up 7.1 percent to 590 yen after it lifted its annual operating
profit forecast on Friday by 10 percent to 5.5 billion yen,
helped by cost cuts.

Investing Basics
(Additional reporting by Elaine Lies; Editing by Michael

Nikkei flat; earnings support but Toyota slips