Japan Stocks Extend Losses; Nomura Plunges 15%; Olympus Drops 29%

Nigel Thomas
08 Nov, 2011
New York City

Stocks in Japan declined for the second day in a row as the yen hovered near recent highs. Toyota Motor reported worse than expected operating profit in the first half. Olympus plunged 29% to a 16-year low after the company admitted securities laws violations.

[R]6:00 PM Tokyo – Stocks in Japan declined for the second day in a row as the yen hovered near recent highs. Toyota Motor reported worse than expected operating profit in the first half. Olympus plunged 29% to a 16-year low after the company admitted securities laws violations.[/R]

Japanese stocks declined for the second day in a row on the worries that the euro zone turmoil may affect banks and brokerage houses in Tokyo. Automakers were on the decline after Toyota withdrew its current year outlook.

Nomura reported exposure to Italian bonds and banks are worried that heightened tension in the euro zone may cut off the access to capital in the region.

Olympus plunged to a 16-year low after the company admitted using merger advisory fees to hide securities losses built up over the years.

The Nikkei 225 Stock Average decreased 1.3% to 8,655.51 and the broader Topix index fell 1.7% to 738.03.

In trading, 1.85 billion shares changed hands on the main board of the Tokyo Stock Exchange compared to 1.45 billion shares on Monday and for every share that gained eight declined.

Stock Movers

Toyota Motor decreased 43 yen to 2,503 yen and Honda Motor Co. fell 59 yen to 2,312 yen and Nissan Motor Co Ltd declined 10 yen to 713 yen.

Toyota reported first half to September loss of 75.39 billion yen and second quarter net profit of 80.42 billion yen. The company said the second quarter profit dropped 18% and withdrew its global unit sales and profit outlook for the current fiscal year on the account of Thai floods.

Sony Corp decreased 57 yen to 1,346 yen, Panasonic Corp fell 24 yen to 702 yen and Canon Inc decreased 5 yen to 3,410 yen.

Nintendo Co. Ltd added 10 yen to 12,110 yen.

Olympus Corp plunged 300 yen or 29% to 734 yen after the company admitted it hid securities losses for years and used the latest merger transaction by paying inflated fees to advisers.

Olympus President Shuichi Takayama blamed recently resigned President Tsuyoshi Kikukawa, Vice President Hisashi Mori and financial auditor Hideo Yamada for the questionable transactions.

Fanuc Ltd decreased 40 yen to 12,900 yen and Kyocera closed up 40 yen at 6,930 yen.

Furukawa Electric Co. extended losses for the second day by 4.2% to 184 yen after it lowered its full-year net earnings outlook to a 5 billion yen loss on Thai floods related production disruptions.

Mitsui OSK Lines, Ltd decreased 13 yen to 265 yen, Kawasaki Kisen Kaisha, Ltd closed down 7 yen to 141 yen and Nippon Yusen K.K. fell 7 yen to 184 yen.

Dai-ichi Life fell 3.3% to 81,200 yen as the yields on the Italian bonds closed higher at a high in the last eleven years to 6.70%. The life insurance company holds bonds of Spain and Italy that have declined in value in the last five months.

Nomura Holdings, Inc decreased 15% or 43 yen to 245 yen after the company earlier had disclosed that it holds Italian bonds worth $3.55 billion.

The stock plunged in heavy trading volume after Italian yield rose to a new high and Prime Minister Silvio Berlusconi is facing a tough vote in a parliament later today.

Property and Casualty insurers declined on the mounting losses related to Thailand floods.

MS & AD Insurance Group Holdings, Inc closed down 19 yen to 1,510 yen and NKSJ Holdings Inc fell 18 yen to 1,543 yen.

Nikon Corp decreased 1.7% to 1,769 yen and a day ago the camera and electronics equipment maker said earnings for six-months to September increased to 50.4 billion yen from 10.6 billion yen a year ago on sales increase of 22%.

Mitsubishi UFJ Financial Group fell 8 yen to 334 yen and Sumitomo Mitsui Financial Group decreased 51 yen to 2,119 yen.

Mitsubishi Corp decreased 48 yen to 1,569 yen and Mitsui & Co, Ltd fell 22 yen to 1,140 yen. Marubeni Corp decreased 18 yen to 459 yen.

Komatsu Ltd decreased 15 yen to 1,951 yen and Hitachi Construction Machinery Co decreased 41 yen to 1,522 yen.