Changing Gears on Japan

Toyota Motor's grim warning that it could turn in its first full-year group operating loss of 150 billion yen ($1.7 billion) sent shockwaves through global markets this week, leaving investors wary of the beleagured auto sector.

“Toyota being the key operator in their market…has been very successful in the past and suddenly coming up with such desperate needs for assistance on loans…is not a good look,” said Lucinda Chan, divisional director at Macquarie Private Wealth on CNBC Asia's "Protect Your Wealth".

(Watch full interview at left)

Likewise for Toyota's rivals, which Chan believes will likely remain under pressure, as they face the same issues as Toyota -- high debt levels and rising stockpiles.

As the stronger yen and global downturn start to bite, it is no surprise that investors like Chan have turned cautious on Japan.

“(This) certainly puts Japan into a deeper recession than they would probably expect to be”, Chan explained.

Coupled with Japan’s soaring deficit and slumping exports, Chan added that “things are not very positive for their market overall”.

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Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."