Thursday, May 7, 2009

Japan's Nikkei Hits 6 Months High, Toyota Falls

. Thursday, May 7, 2009

By stockOzone team

Japan's Nikkei average edged up 0.7 percent on Friday, hitting a six-month high as bank stocks surged after stress tests helped remove uncertainty over the health of U.S. lenders.

Gains were capped as some investors chose to cash in after the market's recent sharp rises, while others were careful about selling stocks too much on views that the worst has passed for the global economy.

Toyota Motor Corp (7203.T) fell 2 percent after the Nikkei business daily said it is likely to forecast a bigger operating loss of 700 billion yen ($7.1 billion) this financial year as global car demand stays weak [ID:nT27060]. Toyota announces results after the close.

"Investor attention is shifting to how much economic data and company earnings figures recover now that big factors such as the U.S. bank stress tests are out of the way," said Hajime Nakajima, deputy general manager of the sales department at Cosmo Securities.

The market is looking to monthly U.S. employment figures due later in the day for signs that the U.S. labour market is bottoming out.

The benchmark Nikkei .N225 rose 62.75 points to 9,448.45 after briefly touching a fresh six-month high of 9,458.70. Some analysts said they saw resistance around 9,500 -- a high marked last November.

The broader Topix gained 0.8 percent to 893.06.

Toyota fell to 3,960 yen.

The world's top automaker is also likely to miss its earnings estimate for the past year by about 10 percent and report an operating loss of around 500 billion yen, the Nikkei said without citing sources. Toyota declined comment.

Consensus estimates had put Toyota's operating loss for the year ended March 31 at 469 billion yen yen.

Other carmakers lost ground as well, with Honda Motor Co (7267.T) slipping 3 percent to 2,960 yen and Suzuki Motor Co (7269.T) shedding 2.8 percent to 1,992 yen. But banks gained, with Mitsubishi UFJ Financial Group (8306.T) surging 7.8 percent to 665 yen and Mizuho Financial Group (8411.T) jumping 6 percent to 246 yen. No.3 bank Sumitomo Mitsui Financial Group (8316.T) rose 4.1 percent to 4,080 yen.

Ten of the top 19 largest U.S. banks were found to need funds to build a capital cushion officials hope will restore faith in financial firms and set a course out of the deepest recession in decades.

Disclosure: Author does not own any of the stocks discussed here.

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