Aug. 10 (Bloomberg) -- Japanese stocks fell, dragging the Nikkei 225 Stock Average to its third straight drop, after the central bank refrained from adding measures to expand liquidity and China’s imports grew at the slowest pace in nine months. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank by market value, slid 0.5 percent. TDK Corp., which got a third of its annual sales in China, sank 1.7 percent. Mitsubishi Corp., Japan’s largest commodities trader, fell 0.9 percent and JX Holdings Inc., its biggest copper miner, lost 2.5 percent as copper prices slid on concern demand from China will drop. The Nikkei 225 fell 0.2 percent to 9,551.05 at the close of trading in Tokyo. The broader Topix lost 0.3 percent to 854.68, with almost three times as many stocks declining as advancing. “China’s bad imports may have prompted worries about its domestic demand, which would have a negative impact on Japan’s external demand,” said Ayako Sera, a strategist in Tokyo at Sumitomo Trust & Banking Co., which manages about $310 billion. “I feel the market overreacted.” Today’s drop in the Topix cut the average price of its stocks to 15.9 times estimated earnings, the cheapest level since March 2009, according to data compiled by Bloomberg. The index has fallen 5.8 percent this year on concern China’s steps to cool its property market and Europe’s debt crisis will slow global economic growth. Stocks reversed this morning’s gains after China’s Customs Bureau said during the midday break in Tokyo that imports rose 22.7 percent in July from a year earlier, the smallest increase since October, when they fell. China is the top export destination for Japanese companies. China Slowdown? “Investors are now worried that the Chinese economy will slow down more than expected,” said Masayoshi Yano, a senior market analyst in Tokyo at Meiwa Securities Co. Concern is mounting that Japanese exports to China will fall, he said. TDK, the world’s biggest maker of magnetic heads for disk drives, sank 1.7 percent to 4,880 yen. Fanuc Ltd., which sells its industrial robots and factory-automation controls to customers in China, lost 0.6 percent to 10,110 yen. They were the biggest individual drags on the Nikkei 225. Mitsubishi UFJ fell 0.5 percent to 430 yen, the heaviest drag on the Topix, followed by Mitsubishi Corp. and JX Holdings. Mitsubishi Corp. slipped 0.9 percent to 1,926 yen and JX Holdings lost 2.5 percent to 471 yen. Copper futures fell amid concern a recent rally was excessive given the risk of slowing demand from China. Also during the trading break in Tokyo today, the Bank of Japan’s policy board kept the benchmark overnight interest rate unchanged at 0.1 percent and maintained its credit programs for lenders by a unanimous vote. “Investors who had expected the BOJ would take steps to ease its monetary policies might be disappointed,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which oversees about $73 billion in assets. --With assistance from Kotaro Tsunetomi in Tokyo. Editors: Nicolas Johnson, Darren Boey. To contact the reporters for this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Kotaro Tsunetomi at ktsunetomi@bloomberg.net. To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

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