April 12 (Bloomberg) -- Japanese stocks fell, sending the Topix index to its lowest this month. Exporters such as Sony Corp. and Honda Motor Co. fell on concern their earnings growth will slow after the yen gained against the dollar and oil prices rose.

``A stronger yen certainly works against exporters and reduces investor appetite for their shares,'' said Soichiro Monji, who helps oversee about $28 billion globally as senior strategist at Daiwa SB Investments Ltd. in Tokyo. ``I expect oil prices to stay high for the time being.''

The Topix fell 10.84, or 0.9 percent, to 1179.28 at the 3 p.m. close in Tokyo. The index fell to the lowest since March 30, as technology shares and automakers accounted for more than 25 percent of the decline. The Nikkei 225 Stock Average dropped 75.34, or 0.6 percent, to 11,670.30.

Nikkei 225 futures fell 0.6 percent to 11,670 in Osaka and dropped 0.6 percent to 11,675 in Singapore. Some 985 billion yen ($9.2 billion) in shares traded, 24 percent less than the three- month, daily average. Almost five stocks fell for every one that gained on the Tokyo Stock Exchange's first section.

Sony, the maker of the PSP portable game console and Cyber- shot digital camera, fell 80 yen or 1.8 percent, to 4,260. The world's second-biggest consumer electronics maker got about 70 percent of its sales from abroad in 2003.

Honda Motor, Japan's third-largest automaker, fell 60 yen, or 1.1 percent, to 5,480. Nissan Motor Co., the nation's No. 2 carmaker, dropped 15 yen, or 1.3 percent, to 1,116.

Yen, Oil

The yen strengthened against the dollar, rising 0.3 percent to 107.57 in Tokyo. The yen has climbed 1.1 percent since slumping to 108.89, the lowest this year, on April 5. A stronger yen decreases the value of exporters' dollar denominated sales.

Crude oil rebounded from the lowest since March 2 yesterday on concern gasoline demand will reduce U.S. inventories of the motor fuel. Oil for May delivery traded as high as $53.94 a barrel in extended trading on the New York Mercantile Exchange.

Technology-related shares also slumped on concern industry demand won't increase enough to offset price declines.

UBS AG yesterday lowered its recommendation on chipmaking- equipment suppliers such as Tokyo Electron Ltd., and South Korea's LG.Philips LCD Co., the world's No. 2 maker of liquid crystal displays, had its first quarterly loss in two years.

Tokyo Electron, the world's second-largest maker of chip- production equipment, fell 80 yen, or 1.3 percent, to 6,100. Tokyo Seimitsu Co., which also supplies chipmaking equipment, dropped 50 yen, or 1.3 percent, to 3,960.

Stepping Back

Advantest Corp., the world's biggest maker of equipment used to test memory chips, fell 120 yen, or 1.4 percent, to 8,230.

``It's difficult to expect buying in technology shares at the moment,'' said Koichi Seki, an equities manager at Chuo Securities Co. ``Investors seem to have taken a step back from the market.''

Yoshitsugu Yamamoto, an analyst at UBS's brokerage unit in Tokyo, lowered his ratings on Tokyo Electron and Tokyo Seimitsu to ``neutral 2'' from ``buy 2'' in a note dated yesterday.

Shares are ``unlikely to rise further in the second quarter unless final demand increased unexpectedly, and we are lowering our semiconductor-production equipment sector weighting,'' Yamamoto wrote. He also lowered this rating on Dainippon Screen Manufacturing Co. to ``reduce 2'' from ``neutral 2.''

The stock dropped 21 yen, or 2.8 percent, to 738.

Sharp Corp., Japan's top maker of liquid-crystal displays and rival to LG.Philips, also fell on concern prices won't soon rebound. The stock fell 44 yen, or 2.6 percent, to 1,642.

``There's a growing feeling a recovery in technology, such as demand for digital electronics and LCD parts, may take longer than most had anticipated,'' said Daiwa SB's Monji.

Advantest Corp. (6857 JT)
Dainippon Screen Manufacturing Co. (7735 JT)
Honda Motor Co. (7267 JT)
Nissan Motor Corp. (7201 JT)
Sharp Corp. (6753 JT)
Sony Corp. (6758 JT)
Tokyo Electron Ltd. (8035 JT)
Tokyo Seimitsu Co. (7729 JT)

To contact the reporter for this story: Michael Tsang in Tokyo at mtsang1@bloomberg.net.

Last Updated: April 12, 2005 02:43 EDT