Tokyo stocks seen extending gains, Toyota in focus

Tokyo, May 10: Tokyo stocks are seen extending gains on Thursday, after closing the previous session at their highest since February's global equity sell-off, following gains in U.S. stocks as the Federal Reserve's latest policy meeting ended without any unwelcome surprises.

Investors are likely to focus on Toyota Motor Corp. Toyota posted a surprise fall in quarterly operating profit on Wednesday as it booked sales costs and other spending early, and it forecast little growth this year to brace for tougher commodity and currency markets.

U.S.-traded shares of Toyota dropped 1 percent to 9.27.

Investors are likely to pick up stocks in shipping firms such as Kawasaki Kisen Kaisha Ltd. and metal producers on high base metal prices, said Masayoshi Okamoto, head of dealing at Jujiya Securities.

''Today's Nikkei is likely to continue its rally following gains in overseas stocks,'' he said.

''But reaching the 18,000 level is unlikely ahead of the settlement of Nikkei options tomorrow as investors refrain from making bold moves.'' Nikkei futures pointed to a slight rise in Tokyo stocks.

Contracts expiring in June closed at 17,815 in Chicago on Wednesday, up 65 points from their close in Osaka The Nikkei is likely to move between 17,600 and 17,850 on Thursday, market participants said.

The benchmark finished the previous session up 0.52 percent at 17,748.12, its highest close since Feb. 27.

The Fed left benchmark interest rates unchanged and said in its policy statement that the economy was growing at a moderate pace and that core inflation, while elevated, is likely to slow.

The Dow Jones industrial average gained 0.40 percent to end at 13,362.87, and the Nasdaq Composite Index was up 0.18 percent.

Texas Instruments shares jumped 4.7 percent after the world's biggest maker of chips for mobile phones said it had raised its profit margin targets.

Japanese companies scheduled to report results on Wednesday include Takeda Pharmaceutical Co. Ltd., Mitsubishi Estate Co Ltd , Casio Computer Co., Takefuji Corp. and Acom Co. Ltd.

Stocks To Watch

Pentax Corp., Hoya Corp. T> Pentax plans to unveil a midterm business strategy on Friday to counter a takeover bid by Hoya, sources familiar with the situation said.

The Japanese camera and medical equipment maker will aims to almost double its annual operating profit in three years to 10 billion yen ( million) in 2009/10, up from 5.5 billion yen expected for the year ended March, the sources said.

-- Japan Airlines Corp. (JAL) T> JAL said on Wednesday it expects to return to profit this business year, reversing course after two years in the red, as it cuts jobs and taps into growing demand for flights to China.

-- Sanyo Electric Co. Ltd. T> Sanyo, in the middle of reviewing its parent-based earnings for the six years to March 2006, said on Wednesday it planned to announce revised financial statements by the end of the year.

-- Nomura Holdings Inc.

Nomura said on Wednesday it is looking to sell its main office building in London, as Japan's largest brokerage looks to cash in on rising real estate prices inthe British capital's financial district.

Reuters>