Toyota Motor Shares Rebound to 16-Month High after Surprising Tumble Yesterday

Shares of Toyota Motor Corp. gained over 5.0 % in early Tokyo trading on Wednesday, after suffering a sharp drop in the final minute of trading on Tuesday. 

The stock rose 5.5%, the most since January 2022, to 1,959.5 yen. That made up for the 4.8% drop the stock saw on Tuesday when a block of 14.5 million shares were sold at the closing price of 1,857 yen per share. Toyota saw US$11 billion wiped off its market cap as a result of the dip.

There is still some confusion regarding the trading of Toyota shares yesterday. However, given that Toyota has not made any major developments recently, some analysts have suggested that a “fat finger” trading error may be to blame for the stock’s decline.

Bloomberg Intelligence’s Tatsuo Yoshida said on Tuesday, “I’ve never seen such a sudden plunge in shares.” “There can be many possible causes for this, including fat finger or closing out of positions, but I can’t see any fundamental reasons to sell this many Toyota shares,” he added.

Morningstar equity strategist David Whiston speculates that “there’s a wide range of reasons” for the sale of the block of shares. “I don’t see anything new in Toyota’s story arc to cause the change,” the analyst said. “Perhaps either someone decided they wanted out or just needed to dump shares to raise funds for something else.”