TOKYO: Tokyo stocks fell in early trade Friday, tracking a weak lead from Wall Street, but Nissan surged more than seven percent after throwing a financial lifeline to troubled Mitsubishi Motors.
Nissan on Thursday announced plans to buy a one-third stake in scandal-hit Mitsubishi for $2.2 billion, forging an alliance to challenge some of the world’s biggest auto groups.
The news came after Mitsubishi was plunged into crisis following bombshell revelations that it has been cheating on fuel-economy tests for years — sparking questions about the company’s future.
On Thursday, Nissan also reported full-year earnings, saying it expects operating profit in the current fiscal year to fall 10 percent due to a stronger yen, as a rise in the currency dampens the outlook for Japanese automakers.
On Friday, Nissan shares soared 7.17 percent to 1,059 yen about 30 minutes after the opening bell, while Mitsubishi — which leaped more than 16 percent on Thursday — was 0.86 percent higher at 580 yen.
Separately, a team of transport ministry officials raided Mitsubishi’s Tokyo headquarters to investigate the misconduct. The ministry has complained that the automaker’s accounts of the matter have been insufficient.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange dropped 0.22 percent, or 36.93 points, to 16,609.41 in early trading.
The broader Topix index of all first-section shares was down 0.16 percent, or 2.15 points, at 1,335.12.
“It’ll be difficult to see a clear direction today,” Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.
“We’re hitting the peak in earnings releases today, and it’ll be a reason to hold off on some trades… I expect Japanese shares to fluctuate in a narrow range.”
On currency markets, the dollar edged lower to 108.91 yen from 109.00 yen on Thursday in New York.
On Wall Street on Thursday, the Dow closed less than 0.1 percent higher, while the S&P 500 slipped less than 0.1 percent and the tech-rich Nasdaq was 0.5 percent lower. AFP