April 13 (Bloomberg) -- Japanese stocks declined, with the Topix index headed for a third day of losses. Takashimaya Co. paced retailers lower after the company said full-year profit missed its forecast and predicted that sales will drop this year.

Exporters such as Kyocera Corp. rose as minutes from a Federal Reserve meeting allayed some concern interest-rate increases will accelerate and stifle U.S. consumer spending.

``The large retailers need to create ways to attract consumers and they're still finding the challenge very difficult,'' said Masaki Iso, who oversees $6.1 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo. ``The Fed's stance on rates and inflation has moderated, easing concerns about slowing global growth.''

The Topix fell 3.61, or 0.3 percent to 1175.67 at 1:07 p.m. in Tokyo. The index has declined 1.8 percent in the past two days. The Nikkei 225 Stock Average dropped 23.54, or 0.2 percent, to 11,646.76.

Nikkei 225 futures fell 0.3 percent to 11,640 in Osaka and slipped 0.2 percent to 11,650 in Singapore.

Retailers declined on concern their sales may not rebound this year as consumers shift their spending from goods to services, according to Yasuda Asset's Iso.

``It's too early to invest in these companies and turning around their businesses will still take time,'' he said.

Takashimaya, Japan's biggest department store operator, dropped 45 yen, or 4.3 percent, to 1,010.

The company said yesterday that net income totaled 13.9 billion yen ($129.4 million), less than the 14.6 billion yen profit it had forecast on Oct. 12. For the current year, Takashimaya is predicting a 1.4 percent decline in sales after slumping fell 7.9 percent for the fiscal year ended in March.

No Slump

Other retailers also dropped. Ito-Yokado Co., Japan's second- largest, fell 40 yen, or 1 percent, to 4,130.

Isetan Co., the nation's fourth-largest department store operator, fell 14 yen, or 1 percent, to 1,341. The company, which cut its full year profit by 31 percent last month, said sales fell for a second month in March, on a year-on-year basis.

Companies that rely on overseas sales gained on optimism that the pace of rate increases in the U.S. won't lead to a slump in economic growth or spending.

Kyocera, the world's biggest maker of packaging for chips including those in mobile phones, gained 120 yen, or 1.6 percent, to 7,790. The company got more than half of its sales from abroad last year. Canon Inc., which generated 70 percent of its sales from overseas last year, gained 20 yen, or 0.4 percent, to 5,750.

Minutes Ease Concern

Minutes from the Fed's Open Market Committee meeting on March 22 released yesterday said that ``many participants stated they expected total inflation to diminish and any rise in core consumer inflation to be limited.''

Since June, the Fed has increased its benchmark rate by a quarter-point seven times to 2.75 percent. The Fed is expected to boost its rate to 3 percent at its next meeting on May 3, according to economists surveyed by Bloomberg News.

The minutes ``help to ease concern over excessive rate increases by the Fed, making it easier to buy exporter stocks,'' said Yutaka Miura, a manager at Shinko Securities Co. in Tokyo.

Elsewhere, Livedoor Co., the Internet portal battling for control of the country's largest media group, jumped on speculation the company may force its main adversary, Fuji Television Network Inc., into an alliance.

Livedoor surged 29 yen, or 9.9 percent, to 322.

Overstated Sales

Bandai Co., Japan's second-largest toymaker by value, climbed 90 yen, or 4.1 percent, to 2,300. Jay Defibaugh, an analyst at Credit Suisse First Boston's unit in Tokyo, raised his rating on the company's shares to ``outperform'' from ``neutral.''

Kanebo Ltd., a food and drugs maker undergoing rehabilitation by the Industrial Revitalization Corp. of Japan, plunged 200 yen or 13.4 percent, to 1,291. The company said it had negative net worth in four years ended March 2003 as former management overstated sales and understated expenses and losses.

The former management inflated earnings by about 200 billion yen from fiscal 1999 to 2003 by overstating sales and understating expenses and excluded losses from money-losing units such as Koyo Senshoku, the Nihon Keizai newspaper earlier reported without citing anyone.

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

Last Updated: April 13, 2005 00:13 EDT