BLBG:Japan Stocks Decline Of Euro Summit, Consumption Tax Vote
Japanese stocks fell a third day on concern European leaders will fail to come up with a solution to the debt crisis at a summit this week and before Japan’s lawmakers vote on a consumption tax increase later today.
Makita Corp., a power-tool maker that gets the highest proportion of sales in Europe among companies listed on the Topix Index, lost 2.1 percent. Honda Motor Co. (7267) slid 1.5 percent after a Chinese official said the government has no imminent plans to subsidize car purchases. Nippon Electric Glass Co. sank 7.8 percent after saying it won’t earn any first-quarter profit.
The Nikkei 225 Stock Average (NKY) fell 0.8 percent to 8,663.99 at the 3 p.m. close in Tokyo, with volume about 6.1 percent above the 30-day average. The broader Topix lost 0.9 percent to 738.89, with about two shares dropping for each that gained. Stocks also fell on a Sankei newspaper report that former Democratic Party of Japan leader Ichiro Ozawa may establish a new party as early as next week to oppose raising the consumption tax.
“Germany is resisting euro-area debt sharing, adding to uncertainty in Europe and making investors more inclined to sell shares,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “I don’t think the consumption tax increase is a good catalyst. Raising the tax will cool domestic demand, forcing the economy to depend more on overseas sales.”
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
