BLBG:Japan Stocks Slip as Weaker Euro Hits Exporters Amid Debt Crisis Concern
Japanese stocks (TPX) declined for a second day as the euro fell to an 11-year low against the yen, clouding the earnings outlook for exporters.
Sony Corp. (6758), which depends on Europe for a fifth of its sales, slid 1.2 percent after France’s’ borrowing costs rose at a bond auction yesterday, added to concern the debt crisis is deepening. Mitsubishi Corp. (8058), Japan’s biggest commodities trader by sales, lost 1.1 percent after oil and metal prices declined. Kawasaki Kisen Kaisha Ltd. (9107) led declines among shipping lines after cargo rates fell the most since October 2008.
The Nikkei 225 (NKY) slipped 1 percent to 8,400.03 as of 12:57 p.m. in Tokyo. The broader Topix (TPX) fell 1 percent to 729.29, trimming the week’s gain to 0.1 percent. Stocks rose at the start of the week amid confidence the U.S. economy is recovering. Gains evaporated in the last two days as France’s bond sale refocused attention on Europe’s debt burden.
“There’s concern that the euro’s weakness is going to continue,” said Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. in Tokyo. “It’s a big negative for Japanese exporters.”
Futures on the Standard & Poor’s 500 Index (SPXL1) fell 0.2 percent today. The gauge rose 0.3 percent yesterday in New York as government data showed fewer Americans filed claims for unemployment insurance last week and ADP Employer Services said payrolls increased by 325,000 in December. A separate report showed consumer confidence in the world’s biggest economy rose to a five-month high.
Europe’s Debt
Japanese stocks fell today after investors demanded higher yields at France’s first debt auction of the year. European countries including Italy and Spain may sell bonds totaling as much as 262 billion euros ($335 billion) in the first quarter, according to Deutsche Bank AG forecasts.
“Italy, Spain and other European countries are going to be rolling over a lot of debt,” said Shinkin Asset’s Fujiwara. “That’s weighing on the yen and it’s a burden for Japan.”
Exporters to Europe declined. Sony fell 1.2 percent to 1,357 yen. Nikon Corp. (7731), a camera maker that gets about a quarter of its revenue from Europe, declined 1.8 percent to 1,702 yen.
The euro fell yesterday to an 11-year low against the yen on concern Europe’s debt crisis is worsening. The 17-nation currency dropped to 98.48 yen last night, its lowest level since December 2000.
Higher borrowing costs in France sparked a drop in oil prices. Crude oil for February delivery lost 1.4 percent to $101.81 a barrel yesterday in New York, its first drop in three days. The London Metal Exchange Index of prices for six metals including copper and aluminum slid 0.5 percent.
Trading Houses, Shippers
Mitsubishi fell 1.1 percent to 1,550 yen. Mitsui & Co., a trading house that counts commodities as its biggest source of profit, slid 0.9 percent to 1,200 yen.
Shipping lines declined the most among the 33 Topix industry groups after the Baltic Dry Index (BDIY), a measure of shipping costs for commodities, yesterday plunged 8.1 percent to the lowest level since Aug. 18.
Nippon Yusen K.K., the country’s biggest shipping company by sales, lost 2 percent to 194 yen. Smaller Mitsui O.S.K. Lines Ltd. retreated 3.7 percent to 285 yen, while Kawasaki Kisen, Japan’s third largest shipper, dropped 4.3 percent to 134 yen.
Japanese stocks plunged last year amid a surge in the yen, natural disasters and nuclear meltdowns at Tokyo Electric Power Co.’s Fukushima Dai-Ichi power plant. The Topix (TPX) dropped 19 percent in 2011, eclipsing an 11 percent decline on the Stoxx Europe 600 Index, ground zero for the debt crisis.
The following are among the most active shares in the Japanese market (NKY) today. Stock symbols are in parentheses after company names.
Bridge makers: Japan Bridge Corp. (5912) (5912 JT) and other bridge makers gained after Daiwa Securities Group Inc. said highway repairs in the Tokyo area may contribute to earnings. Japan Bridge surged 18 percent to 379 yen. P.S. Mitsubishi Construction Co. (1871) (1871 JT) soared 18 percent to 341 yen. Miyaji Engineering Group Inc. (3431) (3431 JT) jumped 13 percent to 200 yen.
Chip-related firms: Elpida Memory Inc. (6665 JT), Renesas Electronics Corp. (6723) (6723 JT) and other firms in the sector declined. Nomura Holdings Inc. cut its forecast for 2012 growth in global shipments of dynamic random access memory to 2.7 percent from 3.7 percent after prices of the chips used to help computers juggle programs plunged. Elpida sank 5.1 percent to 332 yen, while Renesas lost 3 percent to 455 yen. Advantest Corp. (6857) (6857 JT), which makes chip testers, slid 2.8 percent to 756 yen. Elpida also fell after Deutsche Bank AG cut the stock price estimate to 400 yen from 500 yen.
Gulliver International Co. (7599) (7599 JT), a used-car retailer, retreated 5.3 percent to 2,944 yen, set for the lowest close since June 17. The company said net income fell 30 percent to 3.62 billion yen in the nine months ended Nov. 30, citing changes in accounting methods and disaster-related losses.
JFE Holdings Inc. (5411) (5411 JT), Japan’s second-largest steelmaker, dropped 2.3 percent to 1,355 yen. A fire broke out at a JFE Steel facility in a city outside Tokyo, Kyodo News reported, citing a local fire department.
Mitsui Chemicals Inc. (4183) (4183 JT) fell 4.2 percent to 229 yen. JPMorgan Chase & Co. cut its investment rating on the chemicals maker to “neutral” from “overweight,” citing the yen’s appreciation and a possible slump in demand for semiconductors and factory automation. Mitsubishi Chemical Holdings Corp. (4188) (4188 JT) also slid 3 percent to 423 yen.
Tokyo Tatemono Co. (8804 JT) climbed 2.9 percent to 249 yen after Credit Suisse Group AG raised the target price on the developer to 330 yen from 320 yen, maintaining its “outperform” rating. The company will probably return to operating profit in the year ending December 2012 and resume dividend payments, Credit Suisse said in a report yesterday.
To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
