Japanese stocks fell, sending the Nikkei 225 Stock Average to its sharpest drop in almost seven weeks, as a contraction in the U.S. economy and slumping local wages pointed to a deepening of the global recession. Canon Inc., which gets a third of its sales from the Americas, sank 5.1 percent as U.S. gross domestic product shrank the most in a quarter century. Isetan Mitsukoshi Holdings Ltd., Japan’s No. 1 department store, plunged 7.7 percent as the nation’s wages fell a third month. Mitsubishi UFJ Financial Group Inc. lost 5.1 percent after a government move that cut shareholders’ stake in Citigroup Inc. drove down U.S. bank stocks. Inpex Corp. lost 5.6 percent after crude prices fell. “We don’t know yet how long this global recession will last,” said Hisakazu Amano, head of fund management at Tokyo- based T&D Asset Management Co., which oversees about $39 billion. “With the market dominated by an atmosphere of malaise and despair, there are few people who dare to buy.” The Nikkei 225 declined 289.32, or 3.8 percent, to 7,279.10 as of 12:44 p.m. in Tokyo, set for the biggest drop since Jan. 15. The broader Topix index fell 24.02, or 3.2 percent, to 732.69, with all 33 of its industry groups retreating. The Nikkei lost 15 percent this year through Feb. 27 as concern grew that government and central bank measures will fail to prevent a prolonged global economic slump. Almost 50 percent of the gauge’s constituents have seen their values fall by at least half in the 12 months to Feb. 27, according to data compiled by Bloomberg news. Canon, Toyota The Commerce Department said on Feb. 27 the U.S. economy shrank at a 6.2 percent annual pace in the three months to December, the most since 1982 and more than the government had previously estimated. The same day, Standard & Poor’s 500 Index fell 2.4 percent to a 12-year low in New York. Canon, the world’s biggest digital-camera maker, dropped 5.1 percent to 2,410 yen. Toyota Motor Corp., the biggest automaker globally, sank 3.1 percent to 3,080 yen, and Honda Motor Co. slumped 2.9 percent to 2,320 yen. Toyota and Honda were the most actively traded stocks by value in Tokyo. Isetan plunged 7.7 percent to 646 yen, posting the second- steepest decline on the Nikkei. Seven & I Holdings Co., Japan’s largest retailer, dropped 5.5 percent to 2,075 yen. Japanese wages sank 1.3 percent in January from a year earlier, the third-straight monthly decline, the Labor Ministry said today. Overtime pay retreated at the fastest pace ever, indicating manufacturers are paring output. Mitsubishi UFJ, Japan’s biggest listed bank, sank 5.1 percent to 431 yen, and closest domestic rival Mizuho Financial Group Inc. dropped 4.3 percent to 180 yen. Sumitomo Mitsui Financial Group Inc., the No. 3, lost 5.5 percent to 2,995 yen, breaking a five-day winning streak. Banks contributed the most to the Topix’s slump. Copper, Oil Citigroup shares lost 39 percent on Feb. 27 as the Treasury Department agreed to convert its preferred shares into common stock, giving the government a 36 percent stake in the bank. Inpex, Japan’s biggest oil explorer, fell 5.6 percent to 640,000 yen, and rival Japan Petroleum Exploration Co. lost 5 percent to 3,450 yen. Nippon Mining Holdings Inc. tumbled 5.5 percent to 327 yen after saying its planned merger with Nippon Oil Corp. will be delayed by six months to April 2010. Copper futures for May delivery lost 2.6 percent on Feb. 27 for the first drop in five days. Crude oil for April delivery slipped 1 percent, breaking a three-day winning streak. Copper and crude extended declines to a second day today. Bond Purchases Japan may buy as much as 10 trillion yen ($103 billion) in corporate bonds held by banks, the Mainichi newspaper reported today, without saying where it got the information. The report followed comments by Finance Minister Kaoru Yosano on Feb. 26 that he ordered a study into ways to bolster the stock market. “There is growing optimism that the government will take measures to shore up the stock market and implement additional economic measures,” Seiji Arai, a strategist at Mitsubishi UFJ Securities Co., said in an interview with Bloomberg Television. “That’ll provide some support.” Nikkei futures expiring in March retreated 3.6 percent to 7,290 in Osaka and slumped 3.6 percent to 7,285 in Singapore.

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