The Nikkei average closed little changed on Thursday as Toyota Motor Corp slipped after posting a surprise fall in quarterly operating profit while property shares rose on earnings hopes. Investors booked profits on recent gainers such as shipping and resource-related shares.
But bought shares of companies that reported solid earnings, including NTT Data Corp and Secom Co Ltd Mitsui Fudosan Co Ltd climbed after Japan's largest real estate firm unveiled a bullish earnings forecast, prompting investors to buy other property shares and providing support to the market. The Nikkei ended down 11.16 points or 0.06 percent at 17,736.96. On Wednesday it had hit its highest close since February's global equity sell-off.
The broad TOPIX index shed 0.46 percent to 1,736.99. Yoshinori Nagano, a senior strategist at Daiwa Asset Management, said the Nikkei was capped by caution about the chances of a correction in the New York market, which has had a bullish run for about two months.
Trade was active with 2.49 billion shares changing hands on the Tokyo exchange's first section. Declining shares outnumbered advancers 955 to 625. Toyota was a major drag on the Nikkei, ending down 1.8 percent at 7,070 yen.
While Toyota expects its global vehicle shipments to rise 4.3 percent this business year, it forecast nearly flat profits. Toyota is assuming a fall in the dollar to an average of 115 yen in the business year to next March and higher raw materials costs.
Kenichi Hirano, operating officer at Tachibana Securities, said investors have been pulling money out of Toyota since late February on concerns about the outlook, and Thursday's fall is unlikely to have any broader impact on the market.
Masatami Takimoto, executive vice president in charge of powertrain development at Toyota, told Reuters on Thursday the automaker expects to lower costs for hybrid cars sufficient to be able to make as much money on them as it does on conventional gasoline cars by around 2010.
Among other notable losers, Sumitomo Metal Mining Co Ltd fell 2.2 percent to 2,865 yen as investors booked profits after the stock hit a lifetime high the previous session, helped by higher metal prices and expectations for an industry shake-up. But Mitsui Fudosan climbed 2.4 percent to 3,830 yen after Japan's largest property firm said it aimed for an operating profit of 220 billion yen ($1.8 billion) by the 2009/10 business year, up 36 percent from a profit of 161.8 billion yen for 2006/07.
Among other gainers, NTT Data, the biggest computer system integrator in Japan, jumped 6.7 percent to 603,000 yen after posting a 79.6 percent jump in net profit to 50.64 billion yen for the year ended in March thanks to large orders from mobile phone companies and banks.
Secom, Japan's biggest security service group, gained 4.6 percent to 5,750 yen. Okuma Holdings Inc jumped 9.6 percent to 1,649 yen after the machine tool maker posted a record profit in the year ended in March and forecast further growth in 2007/08. After the close of trading, Nikon Corp said its annual profit rose 53.2 percent, helped by strong demand for its advanced cameras, lenses and chip-making equipment. Its shares had closed up 1.7 percent at 3,020 yen.