TOYOTA PAYS HEED TO INVESTORS WITH PLAN TO BUY BACK STOCK.

Byline: Andrew Pollack The New York Times

In a highly unusual move, the Toyota Motor Corp. said Friday that it would spend up to $1 billion to buy back its own stock.

Toyota's stock buyback indicates that Japanese companies are beginning to pay more attention to their shareholders.

Buybacks, which are often used in the United States to raise a company's stock price, have been virtually unheard of in Japan, where shareholders are more docile. Securities analysts have long said that one of the competitive strengths of Japanese companies is that they can focus on long-term goals and use their cash to expand their businesses, without having to worry about share prices or short-term earnings.

Indeed, just a few months ago Japanese auto companies were relieved that they were not in the same situation as the Chrysler Corp., which wanted to save its cash for its business but was being pressured by billionaire Kirk Kerkorian to use it to reward shareholders.

But now things are slowly changing in Japan, in part because a sour economy and low interest rates have forced institutional investors to seek higher returns on their stock holdings.

``It's becoming increasingly important to be aware of shareholders,'' said Saul Rubin, an analyst at SBC Warburg Japan Ltd.

In November, in an effort to bolster the stock market, the Japanese government suspended a tax that had strongly discouraged stock buybacks. Before the three-year suspension, all shareholders of a company that bought back some stock were taxed on the basis that, with fewer shares circulating, the value of the remaining shares had risen.

Since the change in the law, a handful of companies including the Sumitomo Corp., Asahi Breweries, the Tonen Corp. and Amway Japan have announced stock buybacks.

With Toyota, one of Japan's largest manufacturers, now giving the concept respectability, the movement could accelerate, though no one expects it to turn into a mad rush.

``Everyone is just testing the waters at the moment,'' said Kathy Matsui, vice president and chief strategist in Japan for Goldman, Sachs & Co. ``It's kind of a bizarre concept if you're a Japanese company.''

Toyota said it would buy back up to 100 billion yen of its stock, with details to be decided in May and shareholder approval sought in June. At Friday's closing stock price, that would represent 42.37 million shares, or about 1.1 percent of the company's 3.74 billion shares outstanding.