Japanese stocks fell for a second day as metal prices declined and after the dollar weakened against the yen while the Tokyo market was closed yesterday, damping the outlook for export earnings.
Fanuc Corp., a maker of industrial robots that earns about 80 percent of revenue overseas, dropped 1.1 percent. Mazda Motor Corp., Japan’s second-largest car exporter, sank 1.6 percent. Mitsubishi Materials Corp., Japan’s third-largest copper producer, slid 1.5 percent. Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, declined 2.3 percent after Goldman Sachs Group Inc. cut its rating to “sell” and cargo rates dropped to a five-month low. Mitsubishi UFJ Financial Group Inc., a bank whose share price has advanced about 15 percent in the past two months, retreated 1.1 percent.
“The stronger yen will likely lead investors to sell shares to lock in profits,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
The Nikkei 225 Stock Average fell 0.7 percent to 10,275.52 as of 10:22 a.m. in Tokyo. The broader Topix lost 0.5 percent to 901.32, with about three times as many shares declining as advancing. Both gauges are headed for the biggest drop and the lowest close since Dec. 20.
The Topix has retreated about 9.7 percent from its high this year on April 15 as Europe’s debt crisis, China’s steps to curb property prices and concern about U.S. economic growth damped confidence in a global recovery. Shares in the broader index are valued at 15.7 times estimated earnings on average, near a four-month high.
Exporters Decline
The Standard & Poor’s 500 Index fell 0.2 percent yesterday in New York, after a five-day rally that sent the gauge to the most expensive since June.
Fanuc, Japan’s largest maker of industrial robots, fell 0.9 percent to 12,240 yen. Kyocera Corp., an electronic-equipment maker that earns a third of its revenue from the U.S. and Europe, slid 1.4 percent to 8,390 yen. Mazda Motor, a carmaker that generates more than 70 percent of its revenue overseas, sank 1.6 percent to 241 yen. Fuji Heavy Industries Ltd., the maker of Subaru brand vehicles, slipped 1.2 percent to 636 yen.
Makers of electronics and cars were the second- and third- heaviest drags to a drop of the Topix among its 33 industry groups, following banks.
The dollar depreciated to as low as 82.86 against the yen yesterday in New York, the weakest level since Dec. 14. The euro weakened to as low as 108.46 against the Japanese currency yesterday, near the lowest level this month. That reduces the value of overseas income at Japanese companies when converted into their home currency.
Metal Prices Drop
Mitsubishi Materials fell 1.5 percent to 262 yen. Sumitomo Corp., the nation’s third-largest trading house, declined 0.9 percent to 1,154 yen.
Copper futures for March delivery dropped 0.4 percent yesterday in New York. The London Metal Exchange Index of six metals including copper and aluminum, slipped 0.8 percent yesterday, declining for a second consecutive day.
Mitsui O.S.K. tumbled 2.3 percent to 555 yen after its investment rating was cut to “sell” from “buy” by Goldman Sachs. Nippon Yusen K.K., Japan’s largest shipping line by sales, fell 1.1 percent to 365 yen and Kawasaki Kisen Kaisha Ltd, Japan’s third-largest line, slid 0.8 percent to 355 yen, after Goldman cut their target prices and maintained its “neutral” rating on both stocks. Shipping companies had the biggest decline among the Topix’s industry group.
The Baltic Dry Index of shipping costs for commodities declined 1.9 percent yesterday, falling for a 13th consecutive day. That was the lowest level since July 21.
Mitsubishi UFJ Financial, Japan’s biggest publicly traded bank, lost 1.1 percent to 438 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-largest bank that had jumped about 20 percent in the past two months, slipped 0.6 percent to 2,897 yen.
Banking industry stocks rose 15 percent in the past two months, beating the Topix’s 9.9 percent gain in the same period.
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