Tokyo stocks flat at close
Monday, 29 October 2012
TOKYO: Tokyo stocks closed flat on Monday as dealers took a wait-and-see position ahead of a Bank of Japan policy meeting, while auto makers fell after Honda slashed its full-year profit forecast.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange slipped 0.04 percent, or 3.72 points, to 8,929.34 while the broader Topix index of all first-section issues was down 0.13 percent, or 0.93 points, to 740.30.
Stocks gave up early gains and started the afternoon session lower, pushed down by the midday release of Honda Motor's earnings report.
Honda shares dived 4.65 percent to close at 2,399 yen after it said its full-year results would be much weaker than forecast even as its first-half profit more than doubled to $2.7 billion.
"Honda's sales apparently felt the impact from a weaker China market, as well as the stronger yen, and raised the possibility that it will revise down its full-year view yet again," said Hideyuki Ishiguro, strategist at Okasan Securities.
"Of course Honda's problems are not unique. The magnitude of the China impact may be most felt in Nissan's earnings, since it has the heaviest proportional exposure to China," he told Dow Jones Newswires.
The release of the figures had been set for after markets closed but came out several hours earlier with the company blaming a "human error".
Nissan Motor fell 2.18 percent to 670 yen, while Toyota Motor lost 1.62 percent to 3,030 yen.
Japan's central bank is widely expected to take further easing steps at a policy meeting on Tuesday as it looks to counter a slowdown in the world's third-largest economy and tackle the deflation that has plagued it for years.
With interest rates hovering near zero, the bank's main policy tool is an 80 trillion yen ($1.0 trillion) asset-purchase programme.
"The markets have pretty much factored in an additional 10 trillion yen in asset purchases by the central bank," said Tatsunori Kawai, chief strategist at kabu.com Securities.
NEC rose 5.71 percent to 148 yen after the information technology giant announced Friday it booked a $100 million profit in its fiscal first half thanks to a boost in sales and cost-cutting.
Japan's biggest mobile carrier NTT DoCoMo tumbled 5.99 percent to 116,000 yen after it cut its full-year profit forecast owing to rising costs. (AFP)