By Masaki Kondo Oct. 15 (Bloomberg) -- Japan's stocks fell after a $2 trillion global bank rescue plan failed to quell concern slowing demand will weigh on corporate earnings. Nippon Yusen K.K., Japan's biggest shipping line, dropped 7 percent after transport fees for commodities fell to a three-year low and UBS AG cut its share-price target. Nippon Steel Corp. plunged 11 percent after South Korean rival Posco said demand for the alloy will wane for the rest of the year. Mazda Motor Corp. lost 9.2 percent on a newspaper report it will delay building a factory in North America as sales fall. ``This isn't a situation where we can be at all optimistic about the world economy,'' said Hisakazu Amano, head of fund management at T&D Asset Management Co., which oversees the equivalent of $39 billion in Tokyo. ``There are no bright spots in the outlook for U.S. consumer spending, which had been the global growth driver.'' The Nikkei 225 Stock Average lost 108.29, or 1.2 percent, to 9,339.28 as of 12:56 p.m. in Tokyo. The broader Topix index fell 21.47, or 2.3 percent, to 934.83. About two stocks sank for each that advanced on the Topix. Yesterday, the Nikkei and Topix both rose 14 percent, their steepest rallies ever, on optimism a U.S. bank rescue will avert the collapse of global financial markets. Nine U.S. banks will get a total of $125 billion, according to people briefed on the matter, while France, Germany, Spain, the Netherlands and Austria committed $1.8 trillion to guarantee bank loans and acquire stakes in financial companies. Trade Deficit Cooling overseas demand for Japanese goods contributed to the nation's biggest-ever trade deficit, the Ministry of Finance said today. The shortfall was at 236 billion yen ($2.3 billion) in August from a year earlier on a balance-of-payments basis, the largest gap since the release of comparable figures in 1985. Nippon Yusen dropped 7 percent to 495 yen, and Mitsui O.S.K. Lines Ltd., the nation's No. 2 shipping line, retreated 8.9 percent to 613 yen. Kawasaki Kisen Kaisha Ltd., the third largest, declined 8.4 percent to 456 yen. A gauge of shippers was the biggest loser among 33 industry groups on the Topix, followed by an index of steelmakers. Tightening credit prevented businesses from financing marine cargoes, sending the Baltic Dry Index to the lowest level since August 2005. A 1,000 point change in the Baltic alters Nippon Yusen's annual pretax profit by 15 billion yen ($148 million), UBS AG analyst Jun Harada wrote in a report yesterday. He cut annual price targets for Japan's three-biggest shipping lines by as much as 51 percent because of falling cargo fees. Difficulty Ahead Nippon Steel, the world's second-largest mill, slid 11 percent to 326 yen, while its closest competitor JFE Holdings Inc. sank 6.9 percent to 2,345 yen. Lee Dong Hee, Posco's chief financial officer, yesterday said the fourth quarter will be ``very difficult'' as demand is slowing. Mazda fell 9.2 percent to 285 yen. Falling sales pushed Mazda to ``freeze'' its plan to build a factory in North America, Nikkei English News reported. Mazda said in a faxed statement today it was the ``correct management decision'' not to expand production in North America. Yamaha Motor Co., the world's second-largest motorcycle maker, lost 11 percent to 1,101 yen after saying it cut motorcycle production in Brazil. Nikko Citigroup Ltd. slashed its rating on the stock to ``sell'' from ``hold.'' Elpida Memory Inc. wasn't traded as orders to sell outnumbered those to buy. The company, Japan's largest maker of computer-memory chips, yesterday said it had a loss of about 32.2 billion yen in the three months to Sept. 30, compared with a profit a year earlier, as a glut drove down semiconductor prices. Elpida also said it will sell 50 billion yen in convertible bonds to upgrade equipment. Nikkei futures expiring in December retreated 3.3 percent to 9,360 in Osaka and slumped 2.4 percent to 9,365 in Singapore. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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