Aug. 4 (Bloomberg) -- Japan's benchmark stock indexes fell from 15-month highs after Toyota Motor Corp. posted a drop in profit on the costs of building plants and Trend Micro Inc. said a software glitch will cut net income.

``The only thing driving this market right now is earnings,'' said Tatsuro Yuzawa, who helps manage $1.9 billion in Tokyo at Credit Suisse Trust & Banking Co.'s investment arm. ``Toyota's results were pretty much in line with my expectations but there are some people out there who are worried whether the investment will bear fruit.''

The Nikkei 225 Stock Average lost 102.98, or 0.9 percent, to 11,877.22 as of 1:31 p.m. in Tokyo. The Topix index slipped 9.37, or 0.8 percent, to 1202.49. All 33 industry groups that make up the index fell, except for a measure tracking brokerages and mining companies. Both the Nikkei and the Topix yesterday closed at their highest since April 2004.

Nikkei 225 futures for September delivery fell 0.5 percent to 11,880 in Osaka and slipped 0.5 percent to 11,875 in Singapore.

Key benchmarks also fell on concern Prime Minister Junichiro Koizumi may step down amid opposition to his plans to privatize Japan's post office, some investors including Ichiyoshi Investment Management's Mitsushige Akino said.

Voting in the upper house of parliament on postal reform, which was due to take place tomorrow, may be postponed until Aug. 8, local newspapers including the Nihon Keizai reported.

Toyota, Trend Micro

Toyota, the world's biggest carmaker by value, fell from its 10-month-high, losing 80 yen, or 1.9 percent, to 4,200, after posting its second consecutive quarterly profit decline because of increased spending on research and building factories.

Net income fell 6.9 percent to 266.9 billion yen ($2.4 billion). Analysts in a Bloomberg survey expected 305 billion yen.

``The stock had been going up on hopes Toyota will do well, especially since other automakers came out with pretty solid earnings,'' said Credit Suisse Trust's Yuzawa. ``That may be behind the selling today, too.''

Honda Motor Co., which last month raised its full-year earnings forecast, declined 90 yen, or 1.5 percent, to 5,810. Nissan Motor Co., which reiterated its forecast for record full- year earnings last month, lost 9 yen, or 0.8 percent, to 1,167.

Trend Micro, Japan's biggest antivirus software maker, slumped 160 yen, or 4.1 percent, to 3,710. For the three months ending September, net income will fall 10 percent to 3.75 billion yen from a year earlier, Trend Micro said yesterday.

The company said profit will decline partly because of costs to fix an update of the company's software that in April snarled computer systems at about 60 companies.

Following the earnings, UBS AG to cut its rating on the stock to ``neutral 2'' from ``buy 2.''

Earnings Watch

Fuji Soft ABC Inc., a software developer, was among others that reported a decline in profits yesterday. The stock dropped 140 yen, or 4.2 percent, to 3,210, after the company said first- quarter net income slumped 28 percent from a year earlier, citing a 26 percent increase in sales and administration costs.

Deutsche Bank AG lowered its rating on the stock to ``hold'' from ``buy.''

Kose Corp., the nation's sixth-largest cosmetics and toiletries maker, dropped 170 yen, or 4.5 percent, to 3,650. The said it had a first-quarter loss of 404 million yen after it adopted asset impairment accounting.

Konica Minolta Jumps

In contrast, Konica Minolta Holdings Inc., a Japanese maker of office equipment and digital cameras, jumped 68 yen, or 6.8 percent, to 1,064 after the company posted an increase in first- quarter profit on a narrower loss at its photographic unit.

``The first-quarter earnings were ahead of the company projection,'' said Ryohei Takahashi, an analyst at Merrill Lynch in Tokyo, who raised his rating on the stock to ``neutral'' from ``sell'' yesterday. ``This diminishes the risk of repeated downward revision'' for the full year.

Concern that any delay in deciding the postal reform bill will hamper efforts by the government to boost growth in the world's second-largest economy, weighed on stocks, investors said.

Koizumi has called the Japan Post sale the nation's biggest reform in a century, saying private companies rather than bureaucrats should run the institution. Opponents say the sale would result in job losses and end services that private companies aren't willing to offer.

``You can't expect the market to trade up in a straight line,'' said Mitsushige Akino, who oversees $190 million at Ichiyoshi Investment in Tokyo. ``The biggest risk out there is the political risk and until that's sorted out, investors are going to be reluctant to keep buying.''

Political Risk

The lower house of parliament approved the sale last month by a vote of 233-228. The upper house vote may be postponed to next week because senior members of the governing Liberal Democratic Party who have drafted the legislation are seeking to convince more party members to support the bill because they are not confident enough that the bill will be passed, the Nihon Keizai said.

The prime minister said at a July 7 press conference that he would take a rejection of the proposal as a vote of no confidence in his government.

The Topix Securities & Commodity Futures Index, which includes brokerages such as Daiwa Securities Group Inc., gained 0.6 percent amid optimism that increased trading volume will boost their commission fees.

More than 1.5 trillion yen has changed hands in each of the past four sessions, 25 percent more than the daily average for the past month. Today, 999 billion yen in shares included in the Topix have traded so far. Four shares fell for every one that gained on the Tokyo Stock Exchange's first section.

Daiwa Securities, Japan's second-largest brokerage, advanced 10 yen, or 1.5 percent, to 673. Nomura Holdings Inc., the nation's largest brokerage, added 9 yen, or 0.7 percent, to 1,357.

To contact the reporter for this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: August 4, 2005 00:36 EDT