Nikkei in 4-day Advance; Toyota Estimates 31% Fall in Net

Nigel Thomas
10 Jun, 2011
New York City

The benchmark index in Tokyo close higher for the fourth day in a row. Toyota estimated current fiscal year sales to declined 2% and unit sales to drop to 7.24 million and net profit to slump 31%.

[R]5:00 PM Tokyo – The benchmark index in Tokyo close higher for the fourth day in a row. Toyota estimated current fiscal year sales to declined 2% and unit sales to drop to 7.24 million and net profit to slump 31%.[/R]

Stocks in Japan gained for the fourth day in a row and automakers gained ahead of the profit estimate announcement from Toyota. Energy linked stocks gained after crude oil prices rose.

The Nikkei 225 Stock Average added 1.3% to 9,585.59 and the broader Topix index gained 1.1% to 821.92. For the week the Nikkei added 1.1%.

Tokyo trading volume fell to 1.7 billion shares from 1.9 billion on Friday previous week average of 1.8 billion shares.

The yen strengthened to 79.71 from 80.21 against one dollar and rose to 115.60 from 116.10 against one euro.

The Cabinet Office said today its Economy Watchers current conditions index increased to 36 in May from 28.3 in April. The index above 50 indicates improving economic conditions.

Stock Movers

Tokio Marine increased 1.5% to 2,185 yen after the company agreed to acquire California based insurance agency WNC for 3.2 billion yen or $40 million. The news was first reported by Nikkei business daily and confirmed by Ticker.com.

Toyota Motor increased 0.9% to 3,300 yen and Honda Motor added 0.9% to 2,985 yen.

After the close the automaker announced that it estimated net profit in the current year ending in March to declined 31% to 280 billion yen or $3.5 billion. The automaker had earned 408 billion yen in the previous year.

The company also estimated global sales to declined 7.24 million vehicles from 7.3 million in the previous fiscal year. Sales are expected to decline 2% to 18.6 billion yen.

Toyota relies for 43% of its global auto production in Japan and financial performance has been hampered by the recent strength in yen.

Takeda dropped 2.9% to 3,655 yen after the French pharmaceutical regulator restricted the recommendation of the company’s best-selling drug Actos and cited the higher risk of bladder cancer.

Japan Petroleum increased 2.6% to 3,900 yen and Inpex Corp added 1.9% to 588,000 yen after crude oil prices gained in New York and Tokyo.

Kawasaki Heavy Industries Ltd soared 4.3% to 293 yen on the speculation that company’s stand alone small power generators are expected to sell more as Japan faces 15% power cut this summer.