The Nikkei average booked its lowest close in six weeks on Thursday, declining 0.53 percent as concerns about the impact of a stronger yen continued to weigh on shares of exporters such as Toyota Motor Corp Shares of Alps Electric Co Ltd tumbled more than 15 percent after the electronic components maker's profit forecast came in well below market expectations, but a bullish outlook helped boost Ibiden Co Ltd.
NEC Corp may be in focus on Friday after it posted an 84 percent fall in annual profit, hurt by its struggling mobile phone and chip operations. However, the electronics firm also forecast a recovery in the current year.
Investors continued to worry that a stronger yen would eat into profits at Toyota and other Japanese exporters, said Jun Morita, fund manager at Chibagin Asset Management. The yen was at 111.20 to the dollar by the close of Tokyo stock trading. It hit an eight-month high of 110.11 on Wednesday.
A strong yen is a minus for Japan's exporters as it eats into profits when revenues from abroad are brought home.
The Nikkei finished the day down 89.79 points at 16,862.14, its lowest finish since March 28.
The TOPIX index was down 0.80 percent at 1,711.31.
Toyota, the world's most profitable auto maker, fell 2.1 percent to 6,540 yen.
The company on Wednesday projected a modest 1.2 percent rise in operating profit, based on an assumed exchange rate of 110 yen to the dollar.
Rival Nissan Motor Co Ltd dropped 2.3 percent to 1,479 yen. Alps Electric became the biggest contributor to the Nikkei's fall after the maker of electronic parts slid by its daily limit of 300 yen, or 15.3 percent, to 1,659 yen.
It forecast a decline of more than 29 percent in operating profit in the year to March 2007 due to sliding sales of magnetic heads for hard disk drives and other components.
But Ibiden Co Ltd jumped 8.5 percent to 5,720 yen after the maker of printed circuit boards forecast a rise of nearly 30 percent in group recurring profit for the current year.
The shipping sector was one of the day's worst performers. Two of Japan's largest sea transport firms forecast larger-than-expected profit declines for this business year, weighed down by heavy fuel costs.
No 2 shipper Mitsui O.S.K. Lines Ltd declined 2.1 percent to 814 yen and third-ranked Kawasaki Kisen Kaisha Ltd fell 3.6 percent to 699 yen.
Shares of Olympus Corp, which manufactures medical equipment as well as cameras, rose 4.4 percent to 3,330 yen. The company on Wednesday said its annual profit more than doubled and it forecast a higher-than-expected gain to a record profit this year.
In Osaka, shares of Nintendo Co Ltd rose 2.3 percent to 18,460 yen. Discount retailer Don Quijote Co Ltd fell 7.8 percent to 8,930 yen after Credit Suisse lowered its earnings estimates for the current business year. The brokerage also cut its share target price, citing recent gains in the stock.
Trade was slow, with 1.75 billion shares changing hands on the Tokyo exchange's first section, compared to last year's daily average of 2.07 billion shares. More than three shares declined for every advancer.
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