Nikkei slips after U.S. consumer data; Toyota eyed

By Elaine Lies

TOKYO (BestGrowthStock) – Japan’s Nikkei stock average fell 1.5 percent on Wednesday, with exporters hit by a stronger yen and after a sharp drop in U.S. consumer sentiment dented investor confidence in the global economy.

Trade was cautious ahead of congressional testimony from Federal Reserve Chairman Ben Bernanke on interest rate policy beginning on Wednesday and from Toyota President Akio Toyoda on the company’s vast recall troubles.

“Toyota’s hearings are a big focus because if they turn out to be disastrous, the stock could slide further, and the automaker’s impact on other sectors such as auto parts makers is also huge,” said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.

Toyota (7203.T: ), which has lost about $30 billion in market value since its recall crisis intensified on January 21, fell in line with the market.

U.S. consumer confidence slumped to a 10-month low in February as the short-term outlook on jobs worsened, with the data prompting a flight from riskier assets, pushing up the yen against the dollar.

“People are now looking much more closely at indicators, especially ahead of next week when there’s a lot of them, including U.S. jobs data,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

“There’s worry now that consumer confidence will affect spending, which would then affect the economy.”

The benchmark Nikkei (.N225: ) lost 153.27 points to 10,198.83. The broader Topix (.TOPX: ) fell 1.3 percent to 895.69.

Exporters losing ground on a stronger yen included Sony (6758.T: ), which fell 2.5 percent to 3,110 yen and copier and digital camera maker Canon Inc (7751.T: ) which dropped 2.8 percent to 3,720 yen.

Chip-linked shares also fell with Advantest Corp (6857.T: ) down 2.4 percent at 2,165 yen, and Tokyo Electron (8035.T: ), the world’s No. 2 supplier of chip-making equipment, shedding 2.9 percent to 5,660 yen.

The dollar held steady at 90.24 yen after losing almost 1 percent on Tuesday.

Showa Shell Sekiyu (5002.T: ) lost 9.9 percent to 629 yen after UBS Investment Research downgraded the company to “sell” from “buy”, citing a planned dividend cut for this financial year.

Market players said it was still too early to predict how recall-hit Toyota would fare although some were optimistic about the long-term.

“I think they’ll be able to turn the corner on this in the United States in the long-term, since the quality (of their cars) is good. It’s really been more a problem of company response and I think maybe customers will see this,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

Some 1.7 billion shares changed hands on the Tokyo Exchange’s first section, well below the average daily volume last month of roughly 2.6 billion shares, and also below last year’s daily average of 2.3 billion shares.

Declining shares outnumbered advancing ones by more than 5 to 1.

Investment Research

(Additional reporting by Aiko Hayashi; Editing by Edwina Gibbs)

Nikkei slips after U.S. consumer data; Toyota eyed