Japanesestocks fell to a three-month low as more companies cut earnings forecasts and concern mounted that government rescue plans aren’t enough to foster a rapid economic rebound. Daikin Industries Ltd., Japan’s biggest air-conditioner maker, dropped 4.9 percent after cutting its profit forecast by more than half. Yokogawa Electric Corp., the world’s top maker of electronic measuring tools, tumbled 14 percent after reporting a nine-month loss. Nomura Holdings Inc., the country’s No. 1 brokerage, plunged 7.9 percent to a 26-year low on concern U.S. President Barack Obama’s bank-rescue plan doesn’t take concrete steps to fix the financial crisis. The Nikkei 225 Stock Average slumped for a third session, losing 253.33, or 3.2 percent, to 7,692.61 as of 12:52 p.m. in Tokyo. The broader Topix index fell 20.29, or 2.6 percent, to 757.81, the lowest since Oct. 27. Japan’s market was closed yesterday for a national holiday. “I’ve been surprised by the weakness of the manufacturers, I didn’t realize Japan’s business structure was this fragile,” said Masayuki Kubota, a senior fund manager who helps oversee $1.7 billion at Tokyo-based Daiwa SB Investments Ltd. “Many Japanese think expectations for Obama have been over-inflated and disappointment will result in the short term” based on Japan’s own experience with stimulus packages, he said. Daikin dropped 4.9 percent to 2,120 yen after weakening demand prompted the company to lower its net income forecast by 59 percent on Feb. 10. Sega Sammy Holdings Inc., the nation’s largest maker of pachinko machines, sank 5.1 percent to 1,061 yen after saying it will cut about 560 jobs by March. Falling Profit Yokogawa Electric tumbled 14 percent to 362 yen, the lowest level since March 1980 and the biggest decline on the MSCI World Index today. The company swung to a net loss of 37.2 billion yen ($412 million) in the nine months to Dec. 31 as sales were battered by slumping demand and a stronger yen. Japanese companies foresee an 83 percent decline in profit this year, according to data compiled by Shinko Research Institute Co. The rapid slide in earnings is one reason Japan’s economy probably shrank at an 11.7 percent annual rate last quarter, economists estimated, the sharpest contraction since the 1974 oil crisis. On Feb. 10, U.S. Treasury Secretary Timothy Geithner pledged up to $2 trillion for programs to spur new lending and address banks’ illiquid assets. The Standard & Poor’s 500 Index retreated 4.9 percent on concern the plan lacked details. In a second day of Congressional testimony, Geithner yesterday defended the plan, saying it was necessary to move carefully to avoid “quick departures and changes in strategy.” Stimulus Agreement U.S. House and Senate lawmakers agreed on a compromise $789 billion stimulus plan late yesterday, a smaller bill than those originally approved by both groups. Congress may conduct a final vote on the plan within days. Japan’s own 10 trillion-yen stimulus package has been held up in parliament. Nomura declined 7.9 percent to 469 yen, the lowest level since October 1982. Closest domestic rival Daiwa Securities Group Inc. plunged 5.2 percent to 424 yen. Sumitomo Mitsui Financial Group Inc., Japan’s No. 2 bank by market value, slid 4.8 percent to 3,360 yen. Mitsubishi UFJ Financial Group Inc. lost 3.5 percent to 468 yen. Japan’s biggest lender by value may integrate its brokerage unit with Morgan Stanley, the Nikkei newspaper reported yesterday. The company denied the report, according to the Wall Street Journal. Kajima Corp. tumbled 7.1 percent to 208 yen, heading for the lowest since at least September 1974. The general contractor reversed its full-year forecast to a net loss of 7 billion yen from profit of 12 billion yen, citing the stronger yen and bad- debt losses amid the slumping real estate market. Nikkei futures expiring in March sank 3.3 percent to 7,680 in Osaka and dropped 4.5 percent to 7,685 in Singapore.

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