By Aiko Hayashi
TOKYO, Dec 19 (Reuters) - The Nikkei average fell 1.1 percent on Friday in cautious trade ahead of a decision on interest rates by the Bank of Japan, with Toyota Motor retreating after a newspaper report warned about an annual operating loss.
Oil-related shares such as Inpex Corp slid after U.S. crude oil prices dropped sharply, but drugmaker Daiichi Sankyo Co Ltd jumped after European regulators recommended its new blood clot preventer prasugrel for approval.
Trade was choppy with the benchmark moving in and out of positive territory throughout morning trade.
'The number of participants is limited, making the market volatile, as investors want to see if the BOJ will cut interest rates, and due to a lack of trading factors and the holiday season,' said Takahiko Murai, general manager of equities at Nozomi Securities.
'The index will likely move in a narrow range unless currencies start moving drastically or some big news emerges from the United States.'
The Nikkei shed 94.95 points to 8,572.28 and the broader Topix dipped 0.4 percent to 835.53.
The Fed's dramatic rate cut has raised the pressure on a reluctant BOJ to follow suit at its two-day policy review ending on Friday. U.S. interest rates are now below Japanese rates for the first time since February 1993.
TOYOTA SLIPS, DAIICHI SANKYO JUMPS
Toyota shares shed 1 percent to 2,930 yen after the Nikkei financial daily said the world's biggest automaker was likely to report its first-ever operating loss in the year ending March 31 due to plunging sales and the strength of the yen.
Other media said, however, that Toyota may manage to post an operating profit on a consolidated basis although it would likely book a loss on a parent-only basis.
'Toyota shares had already been sold off, but the market will likely start pricing in the possibility that next year will be even worse, preventing the stock price from going above 3,000 yen in the short-term,' said Murai at Nozomi Securities.
Rival Honda Motor Co Ltd shed 0.9 percent to 1,808 yen. Japan's second biggest automaker cut its annual operating profit forecast by two-thirds this week due to a firmer yen and dropping sales.
Oil and gas field developer Inpex tumbled 7.2 percent to 578,000 yen after hitting crude oil hit its lowest since June 2004 as slumping demand and swelling U.S. inventories offset OPEC's record supply cut agreement.
Showa Shell Sekiyu slid 2 percent to 836 yen and Nippon Oil Corp lost 3.6 percent to 402 yen.
Trading houses also fell as they are major dealers in energy and have stakes in oil and gas projects. Mitsubishi Corp , Japan's largest trading house, dropped 2.7 percent to 1,173 yen.
Shares of Daiichi Sankyo jumped 5.1 percent to 2,010 yen after prasugrel developed by the Japan's No. 3 drugmaker and Eli Lilly & Co, won a major endorsement from international regulators on Thursday when the European Medicines Agency recommended its approval.
Banking shares rose, with Mitsubishi UFJ Financial Group , Japan's biggest bank, up 2.2 percent at 554 yen and No.2 Mizuho Financial Group adding 0.9 percent to 259,000 yen.
'Investors picked up stocks of banks or real estate firms because they expect to see some financial measures from the Bank of Japan,' said Tsuyoshi Segawa, an equity strategist at Shinko Securities.
Trade was light on the Tokyo exchange's first section, with 853 million shares changing hands, compared with last week's morning average of 1 billion.
Declining stocks outpaced advancing ones by more than 2 to 1.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
((aiko.hayashi@thomsonreuters.com; Reuters Messaging:aiko.hayashi.reuters.com@reuters.net; +81 3 6441 1802))
Keywords: MARKETS JAPAN STOCKS Reuters Terminal users can see other related news and rates by double-clicking on: All Nikkei indices All shares listed on Nikkei-225 N225 index TOPIX index Nikkei Japan 1000 TOPIX sector data Nikkei 300 index TOPIX futures data Osaka N225 data Chicago N225 data Top 30 by volume Top 30 by value Total volume Total value 1st section sector RICs All TSE weighted avg Top 30 gainers by pct Top 30 losers by pct Top 30 net gainers Top 30 net losers Active Japanese stocks Japan economic indicators ASIA-PACIFIC STOCK MARKETS: Pan-Asia Japan S.Korea S.E. Asia Hong Kong Taiwan Australia/NZ India China OTHER MARKETS: Wall Street Gold Currency Eurostocks Oil JP bonds ADR Report LME metals US bonds Stocks News US Stocks News Europe DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Japan diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news: Top News Japan U.S. company news Europe company news Forex news Global Economy news All Equity news Tech, Media, Telecoms Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: http://topnews.session.rservices.com LIVE PRICES & DATA: World stocks Currencies Dow Jones/NASDAQ Debt FTSE 100 LME price overview Yen/dollar (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TOKYO, Dec 19 (Reuters) - The Nikkei average fell 1.1 percent on Friday in cautious trade ahead of a decision on interest rates by the Bank of Japan, with Toyota Motor retreating after a newspaper report warned about an annual operating loss.
Oil-related shares such as Inpex Corp slid after U.S. crude oil prices dropped sharply, but drugmaker Daiichi Sankyo Co Ltd jumped after European regulators recommended its new blood clot preventer prasugrel for approval.
Trade was choppy with the benchmark moving in and out of positive territory throughout morning trade.
'The number of participants is limited, making the market volatile, as investors want to see if the BOJ will cut interest rates, and due to a lack of trading factors and the holiday season,' said Takahiko Murai, general manager of equities at Nozomi Securities.
'The index will likely move in a narrow range unless currencies start moving drastically or some big news emerges from the United States.'
The Nikkei shed 94.95 points to 8,572.28 and the broader Topix dipped 0.4 percent to 835.53.
The Fed's dramatic rate cut has raised the pressure on a reluctant BOJ to follow suit at its two-day policy review ending on Friday. U.S. interest rates are now below Japanese rates for the first time since February 1993.
TOYOTA SLIPS, DAIICHI SANKYO JUMPS
Toyota shares shed 1 percent to 2,930 yen after the Nikkei financial daily said the world's biggest automaker was likely to report its first-ever operating loss in the year ending March 31 due to plunging sales and the strength of the yen.
Other media said, however, that Toyota may manage to post an operating profit on a consolidated basis although it would likely book a loss on a parent-only basis.
'Toyota shares had already been sold off, but the market will likely start pricing in the possibility that next year will be even worse, preventing the stock price from going above 3,000 yen in the short-term,' said Murai at Nozomi Securities.
Rival Honda Motor Co Ltd shed 0.9 percent to 1,808 yen. Japan's second biggest automaker cut its annual operating profit forecast by two-thirds this week due to a firmer yen and dropping sales.
Oil and gas field developer Inpex tumbled 7.2 percent to 578,000 yen after hitting crude oil hit its lowest since June 2004 as slumping demand and swelling U.S. inventories offset OPEC's record supply cut agreement.
Showa Shell Sekiyu slid 2 percent to 836 yen and Nippon Oil Corp lost 3.6 percent to 402 yen.
Trading houses also fell as they are major dealers in energy and have stakes in oil and gas projects. Mitsubishi Corp , Japan's largest trading house, dropped 2.7 percent to 1,173 yen.
Shares of Daiichi Sankyo jumped 5.1 percent to 2,010 yen after prasugrel developed by the Japan's No. 3 drugmaker and Eli Lilly & Co, won a major endorsement from international regulators on Thursday when the European Medicines Agency recommended its approval.
Banking shares rose, with Mitsubishi UFJ Financial Group , Japan's biggest bank, up 2.2 percent at 554 yen and No.2 Mizuho Financial Group adding 0.9 percent to 259,000 yen.
'Investors picked up stocks of banks or real estate firms because they expect to see some financial measures from the Bank of Japan,' said Tsuyoshi Segawa, an equity strategist at Shinko Securities.
Trade was light on the Tokyo exchange's first section, with 853 million shares changing hands, compared with last week's morning average of 1 billion.
Declining stocks outpaced advancing ones by more than 2 to 1.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
((aiko.hayashi@thomsonreuters.com; Reuters Messaging:aiko.hayashi.reuters.com@reuters.net; +81 3 6441 1802))
Keywords: MARKETS JAPAN STOCKS Reuters Terminal users can see other related news and rates by double-clicking on: All Nikkei indices All shares listed on Nikkei-225 N225 index TOPIX index Nikkei Japan 1000 TOPIX sector data Nikkei 300 index TOPIX futures data Osaka N225 data Chicago N225 data Top 30 by volume Top 30 by value Total volume Total value 1st section sector RICs All TSE weighted avg Top 30 gainers by pct Top 30 losers by pct Top 30 net gainers Top 30 net losers Active Japanese stocks Japan economic indicators ASIA-PACIFIC STOCK MARKETS: Pan-Asia Japan S.Korea S.E. Asia Hong Kong Taiwan Australia/NZ India China OTHER MARKETS: Wall Street Gold Currency Eurostocks Oil JP bonds ADR Report LME metals US bonds Stocks News US Stocks News Europe DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Japan diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news: Top News Japan U.S. company news Europe company news Forex news Global Economy news All Equity news Tech, Media, Telecoms Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: http://topnews.session.rservices.com LIVE PRICES & DATA: World stocks Currencies Dow Jones/NASDAQ Debt FTSE 100 LME price overview Yen/dollar (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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