Japan's Nikkei Rises After Toyota Keeps Forecast; Shippers Fall

By Masaki Kondo

Aug. 8 (Bloomberg) -- Japan's Nikkei 225 Stock Average rose, extending a weekly gain, on speculation companies may weather a slowdown after Toyota Motor Corp. maintained its profit forecast, overshadowing a drop by shipping lines as cargo rates fell.

Toyota, Japan's biggest automaker, gained the most in almost three weeks after it kept annual targets despite a drop in first- quarter profit. Advantest Corp., the world's biggest maker of memory-chip testers, leapt to a two-month high after Mitsubishi UFJ Financial Group Inc. raised it to ``outperform.'' Mitsui O.S.K. Lines Ltd. led shippers to their lowest in five months after transport fees tumbled and UBS AG cut its rating.

``Overseas demand for cars hasn't fallen as much as had been anticipated,'' said Akio Yoshino, Tokyo-based chief economist at Societe Generale Asset Management (Japan), which oversees about $16 billion. ``Demand in some emerging countries such as China and Indonesia will remain robust.''

The Nikkei added 43.42, or 0.3 percent, to close at 13,168.41 in Tokyo, after dropping as much as 1.2 percent. The broader Topix index climbed 1.12, or 0.1 percent, to 1,259.93. The Nikkei posted a weekly gain of 0.6 percent, while the Topix lost 1 percent this week. More stocks fell than those that rose on both benchmarks.

Toyota posted a 28 percent drop in first-quarter net income to 353.7 billion yen ($3.23 billion), which was better than the 329 billion yen median analyst estimate compiled by Bloomberg. Toyota reiterated its annual profit forecast of a 27 percent drop.

Advantest was raised by two levels by Mitsubishi UFJ, which said demand for chip-testing equipment will likely increase in the year ending March 2010.

Meanwhile, the Baltic Dry Index, a measure of coal, iron ore and grain shipping costs, slid for a 20th day, the longest drop since August 2005, in part because of shrinking commodities demand in China.

Nikkei futures expiring in September advanced 0.2 percent to 13,160 in Osaka and gained 0.2 percent to 13,165 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.