Asian stocks fell on Thursday, with Tokyo shares hitting eight-week lows after companies such as Sony disappointed investors by keeping their outlooks unchanged, and oil prices stood just off record highs. The dollar held steady near recent multi-week highs, supported by optimism over the U.S. economy and expectations for a gradual rise in U.S. interest rates, while the yen took weaker-than-expected industrial production data in its stride. Technology stocks led Japanese shares lower after some analysts said they were disappointed that Sony, which reported a surprise quarterly profit on Wednesday, had kept its full-year estimate unchanged. Investors were also nervous ahead of earnings from Japanese firms such as Hitachi Ltd. <6501.T>, Kyocera Corp <6971.T>, Nissan Motor Co. Ltd. <7201.T. > after the market close.
Tokyo's Nikkei stock average <.N225> had dropped 1.3 percent by midday to 11,056.41, off eight-week lows hit earlier. Entertainment and electronics conglomerate Sony Corp. <6758.T> fell 2 percent. "Sony failed to give us a picture of their operating profits growing in the quarters ahead. Restructuring costs are still putting pressure on their profit," said Takahiko Murai, general manager of equities at Nozomi Securities. MSCI's broadest index of Asia Pacific shares outside Japan <.MSCIAPJ> had dropped 0.5 percent by 0237 GMT. The index has fallen about 4 percent so far this year after jumping more than 40 percent in 2003. Oil prices , which have jumped more than 30 percent so far this year, slipped to $42.70, just 0.8 percent off a 21-year high hit on Wednesday after Russian bailiffs ordered beleaguered oil firm YUKOS to stop sales, threatening further strain on tight international supplies. Shares in Hong Kong <.HSI> fell 1.3 percent on fears over record high oil prices, with Cathay Pacific Airways Ltd. <0293.HK> tumbling 2.5 percent. South Korea's benchmark index <.KS11> dropped 1.3 percent. Taiwan <.TWII> was flat ahead of earnings results from Taiwan Semiconductor Manufacturing Co. <2330.TW>, the world's largest contract microchip maker. Smaller rival United Microelectronics Corp. <2303.TW> rose 0.5 percent after it reported a near five-fold jump in quarterly profits after the market close on Wednesday.
DOLLAR EYES DATA
The dollar was around 111.55 yen , almost flat from late U.S. levels and less than a half yen from a six-week high of 111.90 yen hit in New York on Wednesday. The euro was around $1.2060 , also little changed from late U.S. levels, keeping some distance from eight-week lows of $1.1999 hit on Wednesday. Currency dealers are looking to U.S. GDP data on Friday to gauge growth in the world's largest economy. Sharp Corp. <6753.T>, the world's biggest maker of LCD televisions, fell 2.2 percent after it posted a 22 percent rise in quarterly operating profit on Wednesday, slightly below analysts' forecasts. Pioneer Corp. <6773.T>, plunged 10.6 percent, its lowest intraday level since May 2003, after the plasma television maker logged a 49.1 percent decline in group net profit for the April-June period, hit by intensifying competition. Car makers bucked the overall trend in Japan, with Honda Motor Co. <7267.T> up 2.1 percent after it posted a surprise rise in operating profit on Wednesday and raised its full-year forecast. In U.S. equities, Boeing helped lend some support, rising 1.6 percent after it posted a quarterly profit and raised its outlook for 2005, pushing the Dow Jones industrial average <.DJI> up 0.3 percent. The tech-heavy Nasdaq Composite Index <.IXIC> dropped 0.6 percent. Japanese government bond (JGB) prices were little changed, with the yield on the benchmark 10-year cash bond <0#JPTSY=JBTC> at 1.850 percent. Gold edged up to $389.30 an ounce against $388.90 in New York.///