*Nikkei ends morning down 4.4 pct, after falling over 7 pct
*Toyota awash with sell orders after shock profit warning
*Firm yen, global economy worries drag down exporters
(Adds comment, details)
By Aiko Hayashi
TOKYO, Nov 7 (Reuters) - The Nikkei average slid 4.4 percent
on Friday, hurt by a shock profit warning from Toyota Motor Corp
<7203.T> that exacerbated fears of a deepening economic downturn,
with exporters also feeling extra pain from a firmer yen.
Toyota, the world's biggest automaker, was overwhelmed by
sell orders after saying annual operating profit would sink to a
13-year low this year as the financial crisis cripples demand for
cars. []
"What's driving down the market today is Toyota's downward
revision of its forecast and fears over a global economic
recession," said Hiroaki Kuramochi, chief equity marketing
officer at Tokai Tokyo Securities.
The International Monetary Fund said on Thursday the world's
developed economies are headed for the first full-year
contraction since World War II and governments should ramp up
spending. []
The IMF now expects the U.S. economy to contract by 0.7
percent next year. It sees a contraction of 0.2 percent in
Japan's economy in 2009, down from its previous forecast of 0.5
percent growth.
The benchmark Nikkei <> shed 386.85 points to end the
morning at 8,512.29, after falling as much as 7.1 percent at one
stage.
The broader Topix <> dropped 4.1 percent to 872.44.
The dollar fell 0.8 percent to 96.97 yen <JPY=> in early
Asian trade. That hammered exporters already hurt by the global
slowdown and Toyota's gloomy outlook, as a stronger yen curbs
overseas profits when they are brought back home.
"What's really disconcerting is the sharp continuous decline
in U.S. stocks and growing fears over a downturn in the economy
not only this year but for the next year on." said Yumi
Nishimura, manager at Daiwa Securities SMBC.
TOYOTA WOES
Sell orders for Toyota were indicated at 3,310 yen, down by
its daily limit of 500 yen or 13.1 percent from Thursday's close.
The stock fell 16.5 percent <TM.N> in trade in the United States.
Honda Motor Co <7267.T> sank 9.9 percent to 2,230 yen, while
Nissan Motor Co <7201.T> dropped 5.9 percent to 428 yen. Toyota
unit Hino Motors Ltd <7205.T> lost 9.6 percent.
Other auto-related stocks tumbled.
Denso Corp <6902.T> plunged 15 percent to 1,755 yen after
Credit Suisse cut its rating to "neutral" from "outperform,"
saying the auto parts maker would inevitably suffer impact of
Toyota's production decline, though Denso's earnings are expected
to be relatively firm among Toyota group companies.
Among exporters, Canon Inc <7751.T> shed 6.1 percent to 3,260
yen and Sony Corp <6758.T> was down 5 percent at 2,180 yen.
Olympus Corp <7733.T> fell 9.4 percent to 1,610 yen after
posting a 47 percent fall in operating profit for April-September
due to sharp declines in digital camera prices and a firmer yen.
The company also lowered its annual outlook by 23 percent,
missing market expectations.
Trade was light on the Tokyo exchange's first section, with
1.09 billion shares changing hands, compared with last week's
morning average of 1.21 billion.
Declining stocks outpaced advancing ones by more than 5 to 1.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
