Japan Stocks Rally, But Sharp And Toshiba Set For Painful Plunge

Japanese stocks took the share-rally baton from the U.S., with the Nikkei Average up 1.3% in early Monday trade. Some upbeat earnings expectations helped boost the market, even as several major blue chips headed to heavy losses. The broader Topix enjoyed a 1.1% advance, while the yen was little changed from its levels late last week, with the dollar buying �119.75, up slightly from �119.69 ahead of the weekend. Toyota Motor Corp. had dominated the earnings reports Friday, when it posted record net profit for the year ended in March and forecast still stronger results for the current fiscal year. However, investors seemed only mildly impressed, with Toyota Motor shares up 1.2%, trailing the broader market's advance slightly. On the other hand, Nikkei news reports projecting solid earnings from wireless telecoms Softbank Corp. and KDDI Corp. sent their stock up by 2.1% and 3%, respectively, while rival NTT DoCoMo Inc. improved by 2.6%. Likewise, a Nikkei report tipping a forecast-beating 40% jump in operating profit for Tokyo Seimitsu Co. helped propel its shares up 2.8%. Friday's rally in U.S. markets following a solid April employment also appeared to support Tokyo's gains Monday, with globally exposed names showing strength, including Sony Corp. and Panasonic Corp. (up 1.4% each), Trend Micro Inc. (up 2.9%) and Subaru maker Fuji Heavy Industries Ltd. (up 3.1%). But company-specific news hit some major players as well. Toshiba Corp. stock was ask-only, set to plummet after accounting errors forced the company to cancel its dividend and withdraw its current forecasts. Sharp Corp. was also ask-only, with investors reacting to Japanese news reports that the tech major may slash capital levels drastically, in part to reduce its tax bill. Nintendo Co. fell 2.2% after recent gains fueled by its move into mobile gaming and improved financials, while Olympus Corp. dropped 4.4% as McClatchy Tribune reported that Congress may open hearings over a superbug outbreak believed linked to an endoscope made by Olympus.