BLBG: Japanese Stocks Slump on U.S. Retail Sales, Yen; Inpex Drops
Japanese stocks fell, sending the Topix index to its sharpest drop in six weeks, after U.S. retail sales unexpectedly declined in April and the yen strengthened, clouding the earnings outlook for makers of cars and electronics.
Toyota Motor Corp., the world’s biggest automaker, retreated 4.1 percent, while Sony Corp., which gets a quarter of its sales from the U.S., lost 6.8 percent. Inpex Corp., Japan’s largest oil and gas explorer, sank 6.1 percent after it forecast a drop in full-year profit and oil prices slid. Nippon Telegraph & Telephone Corp. jumped 6 percent after saying it will raise its dividend.
“Investors had started expecting a possible recovery even though it wasn’t clear if the global economy had bottomed out,” said Naoteru Teraoka, who helps oversee the equivalent of $23 billion at Chuo Mitsui Asset Management Co. in Tokyo. “That was premature.”
The Nikkei 225 Stock Average retreated 246.76, or 2.6 percent, to close at 9,093.73 in Tokyo. The broader Topix index fell 26.09, or 2.9 percent, to 862.66, the steepest drop since March 30. The Nikkei traded at 130 times estimated profit for its member companies yesterday.
The Nikkei’s dividend yield based on last year’s payouts fell to 2.06 percent, according to index compiler Nikkei Inc. The spread between the dividend yield for the gauge and the return on 10-year Japanese government bonds has more than halved from 179 basis points on March 9, which was the widest level on record according to Bloomberg data.
In New York, the Standard & Poor’s 500 Index slid 2.7 percent yesterday as the Commerce Department reported a 0.4 percent decline in retail sales last month. Economists had estimated the number would be unchanged.
The yen appreciated against the dollar to as much as 95.14 today, the strongest level since March 20, from 96.47 at the close of stock trading in Tokyo yesterday. Japanese businesses expect the rate to average 97.18 this fiscal year, according the Bank of Japan’s quarterly Tankan survey. A stronger yen diminishes the value of overseas sales for Japanese companies.
The U.S. sales report fanned concern falling consumer spending will curb demand for resources. Crude oil for June delivery lost 1.4 percent to $58.02 a barrel in New York, the steepest drop since April 27. Copper futures fell 2.6 percent. Prices for oil and the metal declined today.
