Nikkei sheds 2.1 percent on exporters

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average fell 2.1 percent to a six-week closing low on Friday, hit by negative earnings surprises from firms such as chip equipment maker Advantest Corp and a stronger yen that pressured shares of exporters.

Toyota Motor Corp skidded further after the world’s top automaker said it would extend a recall of millions of vehicles.

Trade in Toyota shares remained active with some 29 million shares changing hands, after volume of more than 38 million shares on Thursday, the most active day of trade in the carmaker’s stock in more than 20 years.

Advantest Corp, which supplies chip testers to chip makers such as Intel, sank more than 10 percent after saying it now expects an annual net loss of 13.5 billion yen ($150 million), missing the market consensus by 16 analysts for a loss of 7.2 billion yen.

Nippon Steel Corp, the world’s second-biggest steelmaker, slipped after forecasting its first annual net loss in seven years as a building slump in Japan squeezes margins.

“Good earnings have already been factored in and investors are now instead sharply reacting to negative surprises such as cuts in earnings outlooks,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

“Uncertainty about the outlook for the U.S. economy and a stronger yen are also something of a double whammy for the Japanese market.”

The benchmark Nikkei fell 216.25 points to 10,198.04, its lowest close since December 21.

The Nikkei shed 3.3 percent in January, following December’s 12.9 percent jump, which was the index’s biggest one-month percentage rise in 14 years.

On Friday the broader Topix shed 1.4 percent to 901.12.

MIZUHO FINACIAL, TOSHIBA

After the market close, Toshiba Corp, Japan’s biggest chipmaker, issued an outlook that was below market estimates on rising materials costs and tumbling TV and PC prices, after posting a smaller-than-expected operating profit.

Toshiba’s shares fell 2.9 percent to 497 yen before the news.

Mizuho Financial Group, Japan’s second-largest bank by assets, posted a return to quarterly profit, helped by a decline in bad loan costs and smaller losses on its stock portfolio, and stuck to its full-year outlook.

Mizuho’s shares finished down 1.7 percent at 175 yen before the results.

Toyota fell 2 percent to 3,490 yen after the world’s top automaker’s problems intensified. It announced it would extend to Europe and China a recall of millions of vehicles due to faulty accelerator pedals and floor mats.

Toyota’s stock has tumbled nearly 14 percent in the past week.

The euro hit a nine-month low of 124.81 yen on trading platform EBS earlier on Friday, although it later shed its losses to stand at 125.89 yen, up 0.2 percent on the day.

Investors fret about a stronger yen as it eats into exporters’ profits when they are repatriated.

Digital camera maker Canon Inc shed 3.9 percent to 3,535 yen and Honda Motor Co slipped 2.1 percent to 3,075 yen.

Advantest tumbled 10.2 percent to 2,253 yen, while Nippon Steel shed 1.5 percent to 329 yen.

Nintendo fell 4.1 percent to 25,250 yen after the games maker posted a 23 percent fall in quarterly profit as software sales for its DS handheld game player slowed and it cut the price of its Wii console.

The company kept its forecast for a first annual profit decline in four years.

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(Additional reporting by Masayuki Kitano; Editing by Michael Watson)

Nikkei sheds 2.1 percent on exporters