5:00AM New York, 7:00PM Tokyo – Tokyo investors took the latest World Bank forecast as an opportunity to sell stocks. Cautious investors are looking to take profits after the global stock market rally of three months. Toyota appointed new grand-son of its founder as new president and reorganized its management structure.

As gloom sets in world markets, investors are increasingly reacting to negative news. The latest estimate on the global economy provided another reason for investors to sell stocks.

The latest read from the bank suggests a contraction of 2.9% from its earlier forecast of 1.7% fall in the current year. The bank increased its estimate of the economic contraction despite the trillions of dollars of government stimulus package announced by world’s largest twenty economies.

Investors were looking for an excuse to sell stocks after a global rally that lasted nearly three months.

Commodity stocks tumbled as crude oil prices slipped 3.9% to $6.9 per barrel and gold prices dipped 1.7% to $921 per ounce.

In Tokyo trading Nikkei 225 index fell 2.8% or 276.61 to 9,549.61, and the broader Topix Index declined 2.3% or 20.79 to 9091.69.

In the first section of the Tokyo Stock Exchange 12.4 billion shares worth 877 billion yen were traded and in the second section 208 million shares valued at 4.4 billion yen changed hands.

Of the Nikkei 225 index stocks, 14 rose, 209 declined, and 2 were unchanged. Nippon Paper led gainers in the index shares with a rise of 3.4% after crude oil prices tumbled 3.9%.

Toyota Forecasts 550 billion yen in 2009

Toyota’s former President Katsuaki Watanabe said the company expects a record loss of 550 billion this year on a 39% decline in U.S. sales and a rising yen.

The automaker has cut its annual dividend by 40 yen to 100 yen in the year ended March and realised its first loss in 59 years last year.

Toyota also appointed Akio Toyoda, grandson of founder, as president of the company. The company also reorganized its management structure and has one new appointed vice chairman and four executive vice presidents.

After the current reorganization the company has five executive vice presidents, two directors and seven corporate auditors and 18 managing directors and 50 managing officers.

Separately, Nissan Motor Co. Carlos Ghosn said that the U.S. market is recovering.

Seven- Eleven to Cover 15% of Disposal Costs

Nikkei News reported that Seven-Eleven Japan Co. said starting from July it will bear 15% of the cost of disposing of expired products at franchise stores, expenditures that have formerly been charged to store owners.

Cabinet Approves Annual Policy Guidelines

Separately, the online edition noted that the Government has endorsed annual policy guidelines abandoning controversial cuts in social security spending as well as the plan to eliminate the core budget deficit by fiscal 2011.

Gainers & Losers

Paper companies increased on falling energy prices. Nippon Paper advanced 3.4%.