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Tokyo: Stocks fall 1.05% at open as Honda, Takeda drop on weak earnings
[TOKYO] Tokyo stocks fell 1.05 per cent at the start Thursday after poor US growth data weighed, with Honda plunging on a weaker earnings report while pharma giant Takeda dropped on a loss warning tied to the settlement of US lawsuits.
The Nikkei 225 index at the Tokyo Stock Exchange fell 211.45 points to 19,847.50 at the start.
Honda plunged as much as 7.6 per cent to 3,999.0 yen after the automaker this week announced profit drops for the fiscal year to March, as it grapples with a series of recalls partly linked to an exploding air-bag crisis.
Takeda fell 5.6 per cent to 5,939.0 yen after Japan's top drugmaker said Wednesday it has agreed to pay $2.4 billion to settle US lawsuits over its Actos diabetes drug, amid cancer claims.
The company said costs regarding the lawsuits would send it into the red for the first time since its stock market listing in 1949. It expects a net loss of US$1.2 billion for the year ended in March.
In New York, the Dow Jones Industrial Average closed down 0.41 per cent on Wednesday after the news that the US economy nearly stalled in the first quarter.
Data showed first quarter growth came in at an annualised 0.2 per cent, well below the 1.0 per cent projected by analysts due in part to extremely harsh winter weather in some regions and a west coast port strike.
Following the data, the US Federal Reserve said the slower growth was due "in part" to transitory factors and that the economy should resume expanding at a "moderate pace".
That suggested the Fed still expects to begin a slow series of rate rises in the coming months, though not likely in June as many analysts had been expecting until recently.
The Bank of Japan wraps up a one-day meeting later Thursday, although few expect policymakers to expand their already massive monetary easing scheme until later this year.
Shortly before markets opened, fresh data showed Japan's factory output fell by a less-than-expected 0.3 per cent in March, but the still-weak statistics underscored an uncertain recovery in the world's number three economy.
In Asian forex trading, the dollar was at 118.95 yen early Thursday, slipping from 119.02 yen in New York.
The euro bought US$1.1122 and 132.31 yen against US$1.1128 and 132.45 yen in US trade.