Japan Trading Houses Fall on Mitsui Earnings; Auto Shares Gain

By Masaki Kondo

April 23 (Bloomberg) -- Japan’s trading company shares slumped after Mitsui & Co. said profit dropped and it won’t pay a second-half dividend. Carmakers rose as Goldman Sachs Group Inc. recommended investors buy Toyota Motor Corp. and Honda Motor Co.

Mitsui & Co., the nation’s No. 2 trading house, sank 5.1 percent after posting a more than a 50 percent decline in annual profit. Nomura Holdings Inc., Japan’s largest brokerage, sank 3.7 percent on a newspaper report it will post a full-year loss. Toyota and Honda climbed at least 1.7 percent as Goldman Sachs said the automakers will expand their U.S. market share. Canon Inc. added 3.3 percent after the Nikkei newspaper said the world’s biggest camera maker may post a first-quarter profit.

The Nikkei 225 Stock Average dipped 14.80, or 0.2 percent, to 8,712.50 as of 9:28 a.m. in Tokyo, reversing an early gain. The broader Topix index slid 2.41, or 0.3 percent, to 827.55. The Nikkei’s members traded at 0.98 times book value yesterday, compared with this year’s low of 0.81 on March 9.

“People are waiting for earnings results for trading cues,” Mitsushige Akino, who oversees the equivalent of $615 million at Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “As the price-to-book ratio is close to 1, stocks aren’t abnormally cheap like they used to be.”

Canon may report 30 billion yen ($306 million) in operating profit for the three months to March 31, the Nikkei said. Demand for single-lens reflex cameras and a weaker yen helped the company avoid a loss, Nikkei said.

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