Toyota $2 Billion Loan Assistance

123jump.com Staff
03 Mar, 2009
New York City

Japan stock indexes fell after automaker Toyota Motor Corp. asked for an emergency bailout package from the Japan Bank for International Cooperation as slowing global demand continue to affect production and squeeze margins. Toyota to ask for $2 billion loan.

[R]5:00AM New York, 7:00PM Tokyo - Toyota to ask for $2 billion loan from Japan Bank for International Cooperation. Japan to provide $5 billion to cash strapped companies.[/R]

Japan stock indexes fell after automaker Toyota Motor Corp. asked for an emergency bailout package from the Japan Bank for International Cooperation as slowing global demand continue to affect production and squeeze margins.

Japan is currently considering a $5 billion package to finance Japanese companies that are facing increased difficulties in accessing financial support from abroad.

In Tokyo trading Nikkei 225 index dropped 0.7% or 50.43 to 7,229.72, and the broader Topix Index shed 1.1% or 7.79 to 726.80.

In the first section of the Tokyo Stock Exchange 9.2 billion shares worth 552 billion yen were traded and in the second section 69 million shares valued at 867 million yen changed hands.

Of the Nikkei 225 index stocks, 78 rose, 132 declined, and 15 were unchanged. Hitachi Construction Machinery led advancers in the index shares with a rise of 5.5% followed by Taiyo Yuden increasing 5.4%.

Toyota Asks for $2 billion Loan

The Nikkei News evening edition reported yesterday that car maker Toyota Motor Corp. is seeking a $2 billion or 200 billion yen loan from the Japan Bank for International Cooperation.

According to the report, the request of the dollar-denominated loan by Toyota Financial Services is the first by an automaker under the emergency program launched.

AFP separately noted that an official with Toyota Financial Services Mio Sugito said the amount to be borrowed is still to be determined and the company is considering diversifying its financial resources as the international financial market tightens.

Japan to Provide $5 billion

Kyodo News reported that the country’s finance minister Kaoru Yosano said today government will provide $5 billion through Japan Bank for International Cooperation financially troubled companies.

Funding will be from the $1 trillion foreign currency reserves.

The JBIC plans to provide loans and debt for the country’s companies operating overseas that are crimped by difficulties in accessing capital.

""We need to ensure smooth financing for Japanese firms operating both in Japan and overseas, as economic conditions get more severe toward the end of the current business year. As an unusual and extraordinary measure, we will lend funds from foreign reserves to JBIC so that the money can supplement the bank''s fund-providing activities,"" said Yosano.

Gainers & Losers

Hitachi Construction Machinery led gainers in the Nikkei 225 index stocks with a rise of 5.5% followed by increases in Taiyo Yuden of 5.4%, in NTN Corp. of 5.3%, in Sony Corp. of 4.5%, and Isuzu Corp. of 4.4%.

Yahoo Japan Corp. led decliners in the Nikkei 225 index stocks with a decline of 9% followed by losses in Mitsui Sumitomo of 7.5%, in CSK Holdings Corp. of 6.1%, in Inpex of 5.8%, and Nippon Oil Corp. of 5.7%.

Inpex fell after crude oil prices fell 0.3% to $40.2 per barrel.

Other commodity-related stocks also declined as crude oil prices eased 10.3% to $940 per ounce. Mitsui & Co. fell 5.5%, Sumitomo Metal Mining dipped 4.7% and Nippon Mining House declined 4.2%.