Nikkei Drops 1.1%; Nissan and Canon in Focus

Hiruki Nakamura
25 Jul, 2013
New York City

Stocks in Tokyo edged lower in volatile trading and the yen weakened a little but investors keenly awaited earnings from large export companies like Nissan, Toyota, Sony and Canon. After the close Canon reported weaker than expected results and Nissan earnings were ahead of expectations.

[R]4:30 PM Tokyo – Stocks in Tokyo edged lower in volatile trading and the yen weakened a little but investors keenly awaited earnings from large export companies like Nissan, Toyota, Sony and Canon. After the close Canon reported weaker than expected results and Nissan earnings were ahead of expectations.[/R]

Market indexes in Tokyo dropped and investors turned cautious. Trading in stocks have been volatile for the last five months as investors look ahead to corporate earnings and a confirmation that a weaker yen is helping exporters.

The Nikkei 225 Stock Average dropped 168.35 or 1.1% to 14,562.93 and the Topix slid 17.60 to 1,202.32.

The yen weakened in Tokyo trading to close at 100.15 against one dollar and exporters rebounded.

Earnings season is in full swing as Canon, Nissan, Daihatsu and Hitachi Chemical were in focus.
After the close Nissan reported higher earnings but did not revise its estimate for the full-year and investors are looking for clues on the impact of the weaker yen.

Stocks in Review

Toyota Motor Corp slid 50 yen to 6,380 yen and Honda Motor Co. fell 10 yen to 3,895 yen.

Nissan Motor Co Ltd fell 6 yen to 1,112 yen and after the close the automotive company reported net profit in the first quarter climbed 14% to 82.02 billion yen.

China sales declined 15% to 284,000 vehicles but U.S. sales surged 20% to 306,000 vehicles from a year earlier.

The auto maker has estimated dollar yen rate of 95 in the fiscal year and estimated that the weaker yen will add 225 billion yen to its operating income. Every one yen decline against the dollar adds 15 billion yen in operating income, the company said at the time of earnings release in May.

Separately, Daihatsu Motor Co said its earnings rose 13% in the latest fiscal quarter and Maruti Suzuki based in India said net jumped 49%.

In Seoul, Hyundai Motor said earnings declined 1.9% and the auto maker lowered its full-year outlook.

Sony declined 83 yen to 2,207 yen. Nikon declined 107 yen or 4.7% to 2,161 yen.

Canon Inc plunged 185 yen or 5.4% to 3,245 yen after the electronic products maker lowered its profit outlook for the year and cut down its sales targets for compact digital cameras on weak demand in China.

Fanuc Corp dropped 200 yen to 14,930 yen and Softbank Corp plummeted 280 yen or 4% to 6,700 yen.

Seven & I Holdings Co slumped 95 yen to 3,850 yen and Fast Retailing Co. climbed 350 to 36,650 yen.

Mitsubishi UFJ Financial Group fell 9 yen to 659 yen and Sumitomo Mitsui Financial Group slipped 75 yen to 4,785 yen.

Daihatsu Motor Co., Ltd. surged 7.9% to 2,237 yen after the automobile company said net sales in the first quarter rose 0.7% 451.8 billion yen from 448.6 billion yen and net income for the quarter increased to 23.3 billion yen compared to 20.6 billion yen.