Japan’s stocks dropped, breaking a seven-day winning streak, after U.S. job cuts exceeded estimates and stoked concern a deepening economic slump will further reduce demand for Japanese-made products. Nintendo Co., which sells four times more Wii game machines in the Americas than in Japan, dived 4.3 percent. Advantest Corp., the world’s biggest maker of memory-chip testers, slumped 8.8 percent after Intel Corp. said fourth-quarter sales fell. Inpex Corp., Japan’s largest oil explorer, lost 7.5 percent after crude oil dropped the most in more than seven years. Daio Paper Corp. rose 5.1 percent, the first gain in seven days, on speculation a stronger yen and cheaper oil will boost profit. “U.S. employment shows where the global economy is headed,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $61 billion. “Investors have been too optimistic recently. We’re still in a harsh economic environment with no change for the better.” The Nikkei 225 Stock Average declined 256.36, or 2.8 percent, to 8,982.88 as of 12:40 p.m. in Tokyo. The broader Topix index fell 17.91, or 2 percent, to 870.34, with more than four stocks slumping for each that advanced. Yesterday, the Nikkei rose for a seventh day in a row, reaching its longest winning streak since April 2006. U.S. President-elect Barack Obama’s $775 billion stimulus had raised expectations the world’s biggest economy would pull out of its yearlong recession. Benchmark constituents traded at 19.6 times estimated earnings for the next fiscal year, jumping from a low of 10.4 times on Oct. 27. Electronics, Chips U.S. private employers cut an estimated 693,000 jobs in December, the most since ADP Employer Services began compiling its private gauge based on payroll data in 2001. The decline was larger than the 495,000 drop estimated by economists in a Bloomberg News survey. Nintendo sank 4.3 percent to 34,650 yen in Osaka trading, the steepest dive in almost a month. Sony Corp., which plans to cut 5 percent of its electronics workforce by March 2010, retreated 3.5 percent to 2,225 yen, partially erasing its 28 percent gain in the past seven sessions. Sharp Corp. slumped 4.8 percent to 854 yen. The company, Japan’s biggest liquid-crystal display television maker, said last month it will close some of its display panel production lines. The Japanese currency strengthened against the dollar to as much as 92.48 today from 93.96 at the close of stock trading in Tokyo yesterday. The Nikkei had a correlation of 0.9 with the yen’s exchange rate in the past year, meaning the two moved almost in tandem. Reductions of jobs and production by Japanese electronics manufacturers come as a weakening outlook for the economy deters American consumers from spending. Intel, whose chips run about 80 percent of the world’s personal computers, yesterday said fourth- quarter sales fell 23 percent, indicating demand is waning in the technology industry. Oil, Paper Advantest plunged 8.8 percent to 1,492 yen, set for the biggest slump since Oct. 27. Tokyo Electron Ltd., the second- largest producer of semiconductor equipment, slid 9.9 percent to 3,470 yen. The stocks were the worst performers on the Nikkei. Inpex tumbled 7.5 percent 690,000 yen, while rival Japan Petroleum Exploration Co. fell 4.7 percent to 4,280 yen. Mining companies posted the steepest decline among 33 industry groups on the Topix. Crude oil for February delivery plummeted 12 percent to $42.63 a barrel in New York yesterday, the steepest drop since September 2001. A $1 price change in a barrel of Brent oil alters Inpex’s annual net income by 2.2 billion yen ($24 million), the company said in May. Oil rose as much as 0.7 percent today. Lower Costs Daio, the nation’s third-biggest papermaker, climbed 5.1 percent to 1,014 yen, the first advance since Dec. 25. Tokyo Electric Power Co., Asia’s largest power generator, jumped 2.2 percent to 2,785 yen. Toyo Suisan Kaisha Ltd., Japan’s second- largest instant noodle maker, led a rally in food producers, gaining 3.3 percent to 2,375 yen. “A stronger yen and cheaper oil will reduce costs of imported materials for domestic-oriented companies like papermakers and power generators,” said Mitsubishi UFJ Asset’s Ishigane. “Domestic-oriented shares should remain the main pillars for portfolios.” Nikkei futures expiring in March retreated 2.6 percent to 9,000 in Osaka and slumped 2.1 percent to 9,010 in Singapore.

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