Posted Dec 28th 2012 7:57AM
Following news that Toyota has proposed a massive settlement to address the owners of vehicles effected by the unintended acceleration recall, shares for the automaker are up 2.6 per cent. Over the course of this year, Toyota's stock has jumped 51.7 per cent.
"My initiate reaction would be 'that's it'... US$1 billion charge that covers recalls and everything else and you are looking at a US$250 million compensation fund, that's nothing," said a senior trader at a foreign brokerage to Automotive News. This settlement has been set aside to cover class-action lawsuits from 16 million owners of Toyota, Lexus and Scion vehicles and is separate from other impending lawsuits – including one consumer protection suit in California and another unfair-business-practices case brought on by 28 attorneys general.
In other positive news for investors, the Japanese yen has weakened compared to the US dollar. That likely means improved financial performance from the big Japanese automakers, the largest of which is Toyota.