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Nikkei heads to longest loss streak in six months

Written by: Staff

TOKYO, May 12 (Reuters) The Nikkei average slid towards its longest losing streak in six months on Friday, dropping 1.88 percent as exporters such as Toyota Motor Corp. fell after the yen rose to an eight-month high against the dollar.

NEC Corp. and Konica Minolta Holdings Inc. were among the firms to post steep declines due to disappointing profit forecasts, but Canon Inc. gained on news of a stock split and increased dividend.

''It is the currency level and earnings results,'' said Hideyuki Suzuki, investment information manager at SBI Securities, referring to the Nikkei's four-day slump, its longest since October.

''When investors looked at earnings forecasts, they found a lot of companies that fell below analysts' expectations,'' he said.

The Nikkei was down 317.80 points at 16,544.34 as of 0504 GMT. If it closes at this level it will post its lowest finish in seven weeks.

The TOPIX index was down 1.52 percent at 1,685.35.

The yen was around 110.11 to the dollar after earlier hitting an eight-month high of 109.91.

A stronger yen is a minus for companies such as Toyota, as it eats into profits when earnings from abroad are brought home.

Toyota, the world's most profitable auto maker, extended its decline into a fifth session, losing 3.1 percent to 6,340 yen.

Electronics conglomerate NEC Corp. dropped 5.5 percent to 736 yen after it posted an 84 percent fall in annual profit on Thursday and forecast a weaker-than-expected recovery this business year.

Shares of Konica Minolta Holdings Inc. slid 7.9 percent to 1,362 yen after the precision equipment maker forecast a 4 percent decline in operating profit for the current year.

But Canon, the world's top digital camera maker, rose 1.8 percent to 8,650 yen.

It announced a 1.5-for-1 share split on Thursday for shareholders as of June 30. It also raised its dividend forecast for calendar 2006 to 110 yen per share from 100 yen.


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