TOKYO Dec 27 Shares of Toyota Motor Corp
gained 1.6 percent on Thursday on relief that its
proposal to pay $1.1 billion to settle U.S. class-action
litigation claims over unintentional acceleration in its
vehicles was smaller than expected.
Toyota said it would take a one-time pretax charge of $1.1
billion to cover the estimated costs of the settlement, court
filings showed, as the carmaker looks to turn the page on the
biggest safety crisis in its history.
Problems with unintended acceleration in Toyota vehicles led
to a series of recalls between 2009 and 2011, leading the firm
to pull back more than 10 million vehicles worldwide and denting
its reputation for quality.
The settlement terms include a $250 million fund for former
Toyota owners who sold vehicles at reduced prices because of bad
publicity, and a separate $250 million fund for owners not
eligible for the brake override system.
"My initiate reaction would be 'that's it' ... $1 billion
charge that covers recalls and everything else and you are
looking at a $250 million compensation fund, that's nothing," a
senior trader at a foreign brokerage said.
The trader added that it removed the uncertainty hanging
over Toyota's share price.
Toyota shares gained 1.6 percent to 3,890 yen in midmorning
trade. The stock has risen 51.7 percent this year, outpacing a
36.5 percent gain in the Topix's transport equipment subindex
, home to Toyota and other automakers.
Adding to positive sentiment for Toyota shares was the
carmaker's announcement the previous day that it expects to
achieve record-high groupwide global sales and production in
calendar year 2012. Groupwide figures include Daihatsu Motor Co
and Hino Motors Ltd.
A sharply weaker yen also buoyed hopes that the company's
earnings will be better than expected.
While Toyota has assumed an average exchange rate of 79 yen
to the dollar for the fiscal year ending in March 2013, the yen
fell to 85.78 to the dollar on Thursday, a more than
two-year low, after Japan's new prime minister vowed to weaken
the currency and implement aggressive economic stimulus.