Nikkei extends slide,Toyota woes weigh

Shares of Toyota,set to report third-quarter results after the bell,fell some 5 per cent and have lost a quarter of their value since a recent high on January 21,as the US government stepped up pressure on the company to address a range of safety issues.

US Transportation Secretary Ray LaHood also advised owners of recalled vehicles to stop driving their cars,although he later characterized the remark as a misstatement.

“Toyota and Toyota group companies are weighing on the market,” said Takashi Ushio,head of the investment strategy division at Marusan Securities.

“There have certainly been a lot of good earnings overall,and more upward forecast revisions than expected,but while this is supporting the market it’s not enough to push it higher ahead of US jobs data and amid current doubts about whether world stock markets have finished with their downward adjustment.”

The benchmark Nikkei fell 89.85 points to 10,314.48,after rising 0.3 per cent the previous day,while the broader Topix fell 1.1 per cent to 905.63.

“Selling is dominating,with good earnings running their course after expectations for those results already buoyed the Nikkei to near 11,000 earlier this year,” said Hiroaki Kuramochi,chief equity marketing officer at Tokai Tokyo Securities.

Denso Corp,the world’s biggest listed auto parts supplier and an affiliate of Toyota,tumbled 8.7 per cent to 2,467 yen,despite Denso tripling its annual operating profit forecast the previous day.

Other suppliers belonging to the Toyota group fell,with Aisin Seiki Co dropping 6.1 per cent to 2,232 yen and Toyota Auto Body Co,a car assembler,shedding 2.1 per cent to 1,543 yen.

Sharp Corp dropped 5.7 per cent to 1,068 yen after reporting a smaller-than-expected quarterly profit,reflecting start-up costs at its new display panel plant.

But Honda rose 2.1 per cent to 3,205 yen,although it was off earlier highs.

Other Japanese companies set to report results later in the day include Sony Corp,Hitachi Ltd and Nikon Corp.