Toyota Leads Decline in Tokyo Stocks

123jump.com Staff
21 Apr, 2009
New York City

Stocks in Japan fell after hopes of earnings recoveries were dashed, a fall in commodities prices and a decline in auto stocks. Toyota led the decline in auto and parts makers stocks after production is likely to fall to 31-year low. JAL is likely to seek low interest loan of $2 billion.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan fell after hopes of earnings recoveries were dashed, a fall in commodities prices and a decline in auto stocks. Toyota led the decline in auto and parts makers stocks after production is likely to fall to 31-year low.[/R]

Japan stock indexes plunged to a two-week low after news that the government will revise downwards economic growth estimates for this year and crude oil prices tumbled 9.7% to $45.90 per barrel.

Auto and parts makers stocks fell sharply after Yomiuri Shimbun reported that Toyota is likely to cuts its global vehicle production to 2.8 million for the first time in 31 years below 3 million vehicles. The auto production of at least 31 million is needed to maintain the current level of full time employment.

123jump.com contacted Toyota spokesman in Tokyo and in California but they declined to comment.

In Tokyo trading Nikkei 225 index fell 2.4% or 213.42 to 8,711.33, and the broader Topix Index shed 2.1% or 17.58 to 830.72.

In the first section of the Tokyo Stock Exchange 11.4 billion shares worth 723 billion yen were traded and in the second section 138 million shares valued at 1.6 billion yen changed hands.

Of the Nikkei 225 index stocks, 24 gained, 199 declined, and 2 were unchanged. Sanyo Electric led gainers in the index shares with a rise of 5.2%.

Japan Airlines Seeking $2 billion Emergency Loans

The AFP reported today Japan Airlines is seeking $2 billion in emergency loans to sustain its operations and employment level.

The report says JAL plans to secure 200 billion yen of low interest loans from the Development Bank of Japan. However, the company has not yet applied for a public loan.

The airline reportedly fears it might not be able to raise funds to buy new aircraft and redeem passengers if conditions continue to deteriorate.

The JAL forecasts that its annual loss in the year ending March 31 will rise to 34 billion yen.

Yen Falls

The Japanese yen declined 1% to 98.10 against the dollar from 98.08 yesterday. The yen fell ahead of monthly international trade statistics report schedule to be released tomorrow.

Gainers & Losers

Sanyo Electric led gainers in the Nikkei 225 index shares with a rise of 8.6% followed by increases in GS Yuasa Corp. of 5.2%, in Sumitomo Osaka of 4.8%, in J Front Retailing of 3.9%, and KDDI Corp. of 3.8%.

Toyota Tsuho led decliners in the Nikkei 225 index shares with a fall of 8.1% followed by losses in Ricoh Co. Ltd of 7.3%, in Mitsui & Co. of 6.5%, in Nitto Boseki Co of 6.3%, and Inpex of 6.1%.

Commodity stocks fell as crude oil prices tumbled 9.7% to $45.9 per barrel. Mitsubishi Corp. declined 6%.

Oji Forecasts First Loss in Seven Years

Oji Paper reported today that it expects to record a group net loss for the year ended March on dropping sales and costs associated with the restructure of the business, its loss in seven years.