Japanese stocks fell for the third time this week after Moody’s Investors Service said it may cut the U.S.’s credit rating, driving down the dollar against the yen and hurting the outlook for Asian exporters. Toyota Motor Corp., which counts North America as its largest market, lost 1.2 percent. Kyocera Corp., a maker of solar panels which gets 17 percent of its revenue in the U.S., dropped 1.5 percent. Nippon Yusen K.K., Japan’s biggest shipping line by sales, retreated 2 percent after cargo rates dropped. The Nikkei 225 Stock Average fell 0.6 percent to 9,899.15 as of 12:40 p.m. in Tokyo. The broader Topix declined 0.6 percent to 855.58, with more than two stocks retreating for each that advanced. “If the U.S. government, facing revenue shortfalls because of the restriction on the issuance of new government bonds, increases taxes or reduces budget expenditures, a negative impact on the economy will be unavoidable,” said Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. in Tokyo. “Exporters to the country will be damaged if consumer spending becomes stagnant.” The Topix lost 24 trillion yen ($300 billion) of market value, or 7.6 percent, through yesterday since March 10, the day before a natural disaster devastated Japan’s northeast. The gauge has risen 5.9 percent in the past month as manufacturers including Toyota said they are restoring production and amid increasing confidence Greece would avoid a default. Debt Ceiling Futures on the Standard & Poor’s 500 Index slid 0.4 percent today. The index yesterday pared gains, closing 0.3 percent up, after Moody’s put the U.S., rated Aaa since 1917, under review for a credit-rating downgrade on concern Congress won’t reach an agreement to raise the federal debt limit in time to prevent a missed payment of interest or principal. Moody’s last reviewed the rating in 1995. U.S. stocks earlier rose as much 1.4 percent after Federal Reserve Chairman Ben S. Bernanke told Congress the central bank is prepared to buy more government bonds, if the recovery appears to be in danger of stalling. The Fed had earlier said it wouldn’t expand a program of Treasury purchases designed to stimulate growth by reducing borrowing costs, boosting stock prices and spurring consumer spending. Japanese stocks slipped today as the focus shifted away from Bernanke’s comments toward the risk of a U.S. default and the impact of dollar weakness on exporters. Toyota, the world’s largest automaker, lost 1.2 percent to 3,325 yen. Nissan Motor Co., which also counts North America as its No. 1 market, declined 0.5 percent to 836 yen. Kyocera dropped 1.5 percent to 8,160 yen. Yen Squeeze “If concerns about the U.S. increase, it’s possible the yen will appreciate further against the dollar,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. in Tokyo. “There will be some selling of exporters as concern mounts that earnings may deteriorate.” The yen appreciated to 78.47 against the dollar, its strongest since March 17, compared with 79.56 at the close of stock trading in Tokyo yesterday. A stronger yen hurts exporters because it cuts the value of their overseas sales. Shipping companies had the biggest drop among the 33 Topix industry groups after the Baltic Dry Index, a measure of cargo rates, dropped 2 percent. Rates have fallen four days straight. Shipping, Chip Companies Nippon Yusen lost 2 percent to 294 yen. Mitsui O.S.K. Lines Ltd., Japan’s second-largest shipping line by sales, slid 0.9 percent to 423 yen. Kawasaki Kisen Kaisha Ltd., the No. 3, declined 0.4 percent to 271 yen. Tokyo Electron Ltd., Japan’s biggest maker of semiconductor equipment, dropped 0.8 percent to 4,265 yen, after JPMorgan Chase & Co. analyst Hisashi Moriyama cut his estimate for the company’s operating profit by 24 percent to 80 billion yen ($1 billion), citing a worsening outlook for orders. The company said bookings may be flat or drop slightly in the three months through September compared with the previous quarter, Moriyama wrote in a report yesterday after an analysts’ meeting with the equipment maker. The company earlier projected orders would increase as much as 15 percent in the period, according to the report. Other semiconductor-related companies also declined. Dainippon Screen Manufacturing Co. slumped 3.9 percent to 647 yen. Advantest Corp., the No. 1 maker of chip-testing equipment, dropped 2.5 percent to 1,474 yen. Sumco Corp., a maker of silicon wafers, retreated 2.9 percent to 1,319 yen. Toho Titanium Among stocks that rose, smelter Toho Titanium Co. climbed 3 percent to 2,366 yen after being rated “outperform” in new coverage at Mitsubishi UFJ Morgan Stanley Securities Co. A “sharp recovery” in titanium demand should boost Toho sales, the securities firm said. Nisshin Steel Co. and Nippon Metal Industry Co. surged after the Nikkan Sangyo newspaper said the steelmakers are in talks to merge. Nippon Metal’s Isao Fujiwara, a deputy manager in the corporate planning department, denied the report. Nisshin Steel said in a statement that “nothing has been decided.” Nisshin Steel advanced 3.3 percent to 159 yen and Nippon Metal climbed 11 percent to 103. To contact the reporter on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net. To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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