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Nikkei heads for 3rd loss as Toyota, Alps decline

Written by: Staff
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TOKYO, May 11 (Reuters) The Nikkei average was headed for a third straight daily loss on Thursday, declining 0.42 percent as concerns about the impact of a stronger yen continued to weigh on shares of exporters such as Toyota Motor Co. Ltd. T> Shares of Alps Electric Co. Ltd. tumbled more than 15 percent after the electronic components maker's profit forecast came in well below market expectations, but a bullish outlook helped boost Ibiden Co. Ltd. Investors continued to worry that a stronger yen would eat into profits at Toyota and other Japanese exporters, said Yoku Ihara, manager of investment information at Retela Crea Securities.

''The currency exchange rate can have a huge impact on earnings,'' Ihara said.

''If we are going to see further strengthening of the yen, there will be a lot of damage to earnings. That makes it hard for investors to buy,'' he said.

The Nikkei was down 71 points at 16,881.13 as of 0442 GMT, on track for its third straight loss.

The TOPIX index was down 0.65 percent at 1,713.92.

The yen was at 111.08 to the dollar, after hitting an eight-month high of 110.11 on Wednesday. A strong yen is a minus for Japan's exporters as it eats into profits when revenues from abroad are brought home.

Toyota, the world's most profitable auto maker, fell 2.1 percent to 6,540 yen.

The company on Wednesday projected a modest 1.2 percent rise in operating profit, which failed to surprise the market.

Electronics parts maker Alps Electric fell by its daily limit of 300 yen, or 15.3 percent, to 1,659 yen.

It forecast a decline of nearly 29 percent in operating profit in the year to March 2007 due to sliding sales of magnetic heads for hard disk drives and other components.

But Ibiden Co. Ltd. jumped 9.3 percent to 5,760 yen after the maker of printed circuit boards forecast a rise of nearly 30 percent in group recurring profit for the current year.

Companies to announce earnings later in the day include NEC Corp., Konica Minolta Holdings Inc. and Takeda Pharmaceutical Co.

Ltd.

REUTERS CS SSC1055

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