Japan Stocks Drop 6.5%, Toyoto Lowers Outlook

123jump.com Staff
06 Nov, 2008
New York City

Stocks in Japan fell sharply on the weak earnings outlook from Toyota and sell off in the U.S. markets. Toyota Motor net revenue declined 6.3% in the first half and estimated annual profit to drop 68%. Isuzu Motors net in the first half fell 19% and lowered annual profit outlook.

[R]5:00AM New York, 7:00PM Tokyo- Nikkei falls on worsening U.S. economic outlook. Toyota Co cuts annual profit forecast by 68% to 550 billion yen.[/R]

Stocks in Japan dropped on news that the private sector in the U.S. cut jobs more than estimated in October and declining profit and earnings forecasts from Isuzu Motors and Toyota Motor Co.

Exporters also fell on a rising yen.

In Tokyo trading Nikkei 225 fell 6.5% or 622.1 to 8,899.14, and the broader Topix Index fell 6% or 57.61 to 909.30.

In the first section of the Tokyo Stock Exchange 23 billion shares worth 1.9 trillion yen were traded and in the second section 398 million shares valued at 3.3 billion yen changed hands.

Of the Nikkei 225 index stocks, 9 increased, 215 declined, and one was unchanged. Japan Steel Work led advancers in the index shares with a rise of 5.6% followed by Softbank Corp. increasing 5%.

Tokyo Office Vacancies Rise 4.3% in October

Miki Shoji said in a report released by the Ministry of Land, Infrastructure, Transport and Tourism that Tokyo office vacancies increased the most in three years to 4.3% in October from 4.07% in September.

Additional space of 49,587 square meters or 15,000 tsubo became available last month on lease cancellations and new supply.

According to the report, the average office rent in the capital''s five main business districts- Chiyoda, Chuo, Minato, Shinjuku and Shibuya- declined to 22,559 yen per tsubo or $69 per square meter in October from 22,732 yen a month earlier.

U.S. Private Employers Cut 157,000 Jobs in October

The U.S. based ADP Employer Services reported yesterday that the U.S private employers cut 157,000 jobs in October and revised jobs lost in September to 26,000 from the initial loss of 8,000. Analysts had earlier expected a cut of 100,000 private sector jobs in October.

Separately, the Institute for Supply Management said service industries index in the U.S. eased to 44.4 from the projected 47.

Gainers & Losers

Japan Steel Work led gainers in the Nikkei 225 index shares with a rise of 5.6% followed by increases in Softbank Corp. of 5%, in Ajinomoto of 2%, in Secom Co. Ltd of 1.9%, and KDDI Corp. of 1%.

Isuzu Motors led decliners in the Nikkei 225 index shares with a fall of 20.7% followed by losses in Ricoh Co Ltd. of 15.9%, in Chuo Mitsui Trust of 15.6%, in Sumco Corp. of 15.4%, and Nippon Oil of 15%.

Isuzu Motors declined after the automaker reported that profit in the first half-ended September declined 19% on a stronger yen and falling demand from Taiwan. The company also halved net profit forecast for the fiscal year through March to 40 billion yen.

Revenue outlook was also downgraded by 11% to 1.65 trillion yen.

Nippon Oil slid after crude oil prices for December delivery lost 7.4% to $63.30 per barrel.

Exporters also plunged as the yen rose to 97.57 from 99.58 against the dollar yesterday. Canon plummeted 12.6% and Olympus Corp. of 11.8%.

Earnings Review

Toyota Motor Corp. reported that net revenues in the first six months ended September declined 6.3% to 12 trillion yen from 13 trillion yen a year ago, while operating income fell 54.2% to 582 billion yen from 1.2 trillion yen a year ago.

The carmaker forecasts that annual revenues ending in April 1 will decline 12.5% to 23 trillion yen and net to dip 68% to 550 billion yen.