You are here

Toshiba dives to 35-year low as Tokyo shares turn lower


[TOKYO] Toshiba shares dived to a more than 35-year low on Friday after the scandal-hit firm widened its annual loss forecast to a whopping US$6.0 billion, while a strong yen dragged the Nikkei into the red.

The company's gaping shortfall was announced after markets closed on Thursday and the firm's stock plummeted nearly 14 per cent to 171 yen by the break Friday, its lowest close since late 1979.

One of Japan's best-known firms, Toshiba - which makes everything from rice cookers to nuclear reactors - has taken huge charges in the wake of an embarrassing profit-padding scandal, and it also blamed the global economic slowdown for weak sales.

Bucking the downtrend, Sharp soared 8.75 per cent to 174 yen as Japan's Kyodo News said the embattled firm could announce Friday it has agreed to a bailout from Foxconn parent company Hon Hai Precision.

Sharp's volatile stock skyrocketed more than 25 per cent at one stage on Thursday on news that the electronics giant - which has teetered on the edge of bankruptcy for years - was mulling rival rescue offers, including one from the Taiwan-based giant.

But the strong yen dragged the overall market lower, with Tokyo's benchmark Nikkei 225 index falling 1.49 per cent, or 253.43 points, to 16,791.56 by the break. The broader Topix index of all first-section shares dropped 1.82 per cent, or 25.24 points, to 1,363.57.

The greenback was up slightly at 116.83 yen from 116.74 yen on Thursday in New York. But it is still sharply down sharply from levels above 121 yen seen earlier in the week.

A stronger yen hurts Japanese exporters' profitability and tends to knock demand for their shares.

The yen dived last week after the Bank of Japan said it would adopt a negative interest rate policy, which stoked a brief global equities rally.

"The Bank of Japan has done what they should, but what they could do had its limits," Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.

"Until now, the view on the US economy was that it was recovering, but the pace wasn't as fast as hoped. Now there's some concern in the market that it may actually be contracting." Investors will keep a close eye on US jobs figures later Friday, after a disappointing services sector report this week aggravated worries about the world's top economy.

In other Tokyo trading, Toyota fell 2.75 per cent to 6,566 yen, ahead of its latest earnings report on Friday.

Banking giant Mitsubishi UFJ was down 4.26 per cent at 534 yen, while Uniqlo operator Fast Retailing, a market heavyweight, fell 1.75 per cent to 34,780 yen.