BLBG: Japan's Nikkei Falls Most in Month; Carmakers Drop as Yen Threatens Profit
Japanese stocks fell, with the Nikkei 225 Stock Average dropping the most in a month. Carmakers slid on speculation the yen will remain strong against the dollar as the U.S. Federal Reserve eases monetary policy.
Toyota Motor Corp., the world’s largest carmaker, lost 1.5 percent. Honda Motor Co., Japan’s second-largest carmaker, sank 2 percent. Fast Retailing Co. tumbled 10 percent after forecasting a profit drop. Oki Electric Industry Co., a maker of communications equipment, plunged 16 percent after forecasting a loss and saying it will sell 30 billion yen ($365 million) in preferred shares.
The Nikkei 225 lost 2.1 percent to 9,388.64 at the 3 p.m. market close in Tokyo, the biggest decline since Sept. 8. The Topix index fell 1.8 percent to 824.6, with about 20 stocks retreating for each that rose. Japan’s markets were shut yesterday for a national holiday.
“The consensus is that the U.S. will further ease monetary policy and the dollar will remain weak,” said Masaru Hamasaki, who helps oversee about $17 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “Concerns about Japanese corporate earnings are getting stronger because of the currency’s appreciation.”
The Topix has declined 9.1 percent in 2010, compared with gains of 4.5 percent by the S&P 500 and 3.7 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 14.7 times estimated earnings, compared with 13.9 times for the S&P and 12.1 times for the Stoxx.
Futures on the Standard & Poor’s 500 Index slipped 0.7 percent. In New York, the index climbed less than 0.1 percent to 1,165.3 yesterday as trading volume sank to the lowest level of the year, amid growing speculation the Federal Reserve will pump more cash into the economy to protect the recovery after payrolls declined more than expected.
The dollar reached 81.39 yen yesterday, the lowest level since April 1995. The U.S. currency fell to as low as 81.81 yen today, compared with 82.37 at the close of stock trading in Tokyo on Oct. 8.
To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
