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Nikkei sinks 2 pct as Toyota, other exporters hit

Written by: Staff
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TOKYO, May 12 (Reuters) The Nikkei average tumbled 2.2 percent on Friday as Toyota Motor Corp. fell along with other exporters after a slump in U.S. stocks further undermined investor sentiment already hurt by a rise in the yen.

A rise in the yen to eight-month highs versus the dollar raised concern that exporters' profits abroad would decline when brought home, while higher oil prices added to worries over corporate earnings due to higher material costs.

''A fall in U.S. stocks fanned a sell-off here,'' said Teruhisa Ishikawa, manager at Mizuho Investors Securities' investment information department. ''That added to worries over the dollar/yen rate and higher oil prices.'' The Nikkei was down 370.66 points at 16,491.48 as of 0108 GMT. It earlier fell to as low as 16,458.93, its lowest intraday level since March 20.

The TOPIX index was down 1.86 percent at 1,679.49.

The dollar was at around 110.36 yen in Tokyo morning after falling briefly below 110 yen to a new eight-month low.

Companies to announce earnings later in the day include Nippon Yusen KK, Daiichi Sankyo Co. Ltd., Ajinomoto Co. Ltd., Tokyo Electron Ltd., Orix Corp. and Nippon Telegraph and Telephone Corp.

Toyota, the world's most profitable auto maker, fell 2.9 percent to 6,350 yen, extending its losses into a fifth session.

The company on Wednesday projected a 1.2 percent rise in operating profit, based on an assumed exchange rate of 110 yen to the dollar.

Honda Motor Co. Ltd. lost 2.5 percent to 7,780 yen. Tyre maker Bridgestone Corp. fell 3.6 percent to 2,580 yen.

Electronics conglomerate NEC Corp. sank 6.9 percent to 725 yen after the company posted an 84 percent fall in annual profit on Thursday, hurt by its struggling mobile phone and chip operations.

But shares of Canon Inc., the most active issue by value on the Tokyo exchange's first section, rose 1.1 percent to 8,590 yen.

The manufacturer of cameras and copiers on Thursday announced a 1.5-for-1 share split for shareholders as of June 30. The company also raised its dividend forecast for the 2006 calendar year to 110 yen per share from 100 yen.

REUTERS PDS PM0720

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