By Masaki Kondo Nov. 26 (Bloomberg) -- Japan’s stocks fell as concern falling home prices will curb U.S. spending overshadowed a Federal Reserve plan to commit an additional $800 billion to unfreeze credit markets. Funai Electric Co., which gets about 70 percent of its sales from North America, lost 6.4 percent as a record slump in house prices eroded the borrowing and spending power of U.S. consumers. Toyota Motor Corp. declined 4.6 percent after Fitch Ratings cut its credit rating on the carmaker for the first time in 10 years. Sumitomo Trust & Banking Co. sank 4.8 percent after the bank said it will sell shares to boost capital. The Nikkei 225 Stock Average lost 110.71, or 1.3 percent, to close at 8,213.22 in Tokyo, snapping a two-day gain that lifted the gauge 8.1 percent. The broader Topix index fell 14.36, or 1.7 percent, to 817.22, with almost three stocks dropping for each that rose. The value of stocks traded in Tokyo fell 23 percent from the previous day to the lowest level since Dec. 28. “U.S. house prices won’t bottom out until the latter half of next year or 2010,” said Hideyuki Ookoshi, who helps oversee about $365 million at Chiba-Gin Asset Management Co. “I’m still wary of the market outlook, so I’m increasing my cash position instead of tinkering around with stockholdings.” Three-quarters of stocks on the Topix trade at below their book values, and 30 percent have lost more than half their value this year. The collapse of the U.S. housing market has cost financial firms almost $1 trillion in losses and writedowns, pulling the global economy into recession as banks hoarded cash and consumers reduced spending. The S&P/Case-Shiller home-price index tumbled 17.4 percent in September from a year earlier, the fastest pace on record, as rising foreclosures in the U.S. pushed down property values. To unfreeze credit for homebuyers, the Fed will purchase as much as $600 billion of debt issued or backed by government- chartered housing-finance companies, the central bank said yesterday. It will also establish a $200 billion program to shore up consumer and small-business loans. Nikkei futures expiring in December retreated 1.8 percent to 8,190 in Osaka and slumped 1.6 percent to 8,195 in Singapore. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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