TOKYO, Feb. 7 (Xinhua) -- Tokyo stocks closed lower Thursday following U.S. shares retreating overnight and auto issues here losing ground after Toyota's subpar earnings report a day earlier, but SoftBank Group's announcement of a share buyback scheme helped pare losses with its solid advance.
The 225-issue Nikkei Stock Average dropped 122.78 points, or 0.59 percent, from Wednesday to close the day at 20,751.28.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 13.10 points, or 0.83 percent, to finish at 1,569.03.
Investor concerns about domestic firms' slowing corporate earnings coupled with worse-than-expected earnings from video game-related companies in the U.S. weighing on markets in New York overnight saw stocks here pressured from the off, local market analysts said.
"Many of the Japanese and U.S. companies have cut their earnings forecasts during this earnings season so investors find it difficult to buy," Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute, was quoted as saying.
From a domestic point of view Hirakawa and other analysts were referring in particular to auto giant Toyota Motor Corp. who announced Wednesday it had cut its group net profit forecast for the business year through March, owing to appraisal losses from its investments in affiliates.
Toyota said that owing to its investment losses, it now projects a group net profit of 1.87 trillion yen (17 billion U.S. dollars) in the business year ending March 31.
This compares to a 2.3 trillion yen (20.91 billion U.S. dollars) earlier estimate made by the automaker, analysts highlighted.
"We expect that sales in the United States will slow and those in the Middle East to struggle going forward but sales will expand in China and western Europe," Toyota's Senior Managing Officer Masayoshi Shirayanagi told a press conference on the matter.
Japan's top automaker also said it expected a production slump in some of its major markets, technical strategists said.
Toyota said that while it expects sales in its Asian markets to increase to 1.68 million units from 1.54 million vehicles and those in Europe to rise to 970,000 vehicles from 968,000 units, for this fiscal year, sales in North America are expected to decline from 2.81 million units a year earlier to 2.75 million vehicles.
"Foreign investors sold Toyota as its stagnant performance in North America and Europe is making them worried about its outlook there prompting selling across almost the whole sector," Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., was quoted as saying.
As a result, auto-related issues duly retreated Thursday, with Toyota skidding down 1.9 percent to 6,575 yen and Honda reversing 1.1 percent to close at 3,002 yen. Hino Motors fell 3.1 percent to 1,036 yen and Suzuki Motor ended the day down 2.8 percent.
Bucking the downward trend for automakers, however, Mazda Motor Corp. accelerated 6.4 percent after the automaker announced a full-year operating profit forecast of 80 billion yen (727 billion U.S. dollars), compared to its previous projection of 70 billion yen (636 billion U.S. dollars).
The market's downside Thursday was ultimately supported by SoftBank Group Corp. announcing Wednesday its group net profit had increased 51.6 percent in the April-December period owing to gains from investments through its Saudi-backed Vision Fund.
In addition, the market mood was buoyed Thursday by the Tokyo-based conglomerate also announcing a 600 billion yen (5.45 billion U.S. dollar) share buyback, saying it would repurchase 112 million shares over the the next 11 months, which comprises around 10.3 percent of its total outstanding shares.
SoftBank Group has been successful in increasing its valuations for its tech-based investments and the buyback plan comes after 2.35 trillion yen (21.41 billion U.S. dollars) was raised in December by listing about one-third of the shares in Japan-based telecommunication firm SoftBank Corp.
SoftBank Group rocketed 17.7 percent to close the day at 9,962 yen.
Tracking their peers losses on Wall Street overnight, video game makers weighed, with Nintendo slipping 0.6 percent to 29,315 yen following the lowering of its full-year revenue forecast by U.S. counterpart Electronic Arts.
Sony also lost ground, losing 2.6 percent to finish at 4,713 yen
Among other issues weighing on the market, sportswear maker Descente relinquished 1.2 percent to 2,638 yen after rejecting its biggest shareholder Itochu trading house's offer to acquire a larger stake in the sports maker.
Itochu, for its part, lost 1 percent to close the day at 2,030 yen.
By the close of play, oil and coal product, pulp and paper, and mining-oriented issues comprised those that declined the most, and falling issues outpaced rising ones by 1,575 to 489 on the First Section, while 63 ended the day unchanged.
On the main section on Thursday, 1,250.75 million shares changed hands, rising from Wednesday's volume of 1,250.15 million shares.
The turnover on the penultimate trading day of the week came to 2,555.3 billion yen (23.24 billion U.S. dollars). Enditem