Japanese Stocks Fall on U.S. Jobless Claims, Manufacturing; Sharp Slumps

Japanese stocks dropped, sending benchmark gauges to their second weekly decline, after worse- than-expected jobs and manufacturing data in the U.S. and on a report Sharp Corp. will cut output of liquid crystal displays.

Canon Inc., the world’s biggest maker of cameras, sank 2.2 percent. Sharp lost 2.7 percent after the Nikkei newspaper said Japan’s biggest maker of LCDs will reduce panel production. JSR Corp., which makes materials for LCDs, slid 4.4 percent on UBS AG’s rating cut. Nippon Sheet Glass Co., which supplies glass for cars and buildings, had the biggest drop in the Nikkei 225 Stock Average amid speculation it will sell shares.

“Demand is declining across the world and the economic recovery can’t be achieved without a rebound in demand,” said Hisakazu Amano, who helps oversee about $29 billion in Tokyo at T&D Asset Management Co. “Domestic factors can’t change the direction of Japan’s market. Investors are hoping to see an upturn in the U.S. economy.”

The Nikkei 225 fell 2 percent to 9,179.38 at the 3 p.m. close in Tokyo. The broader Topix index declined 1.7 percent to 829.59 with almost 10 times as many stocks retreating as advancing. All 33 industry groups in the Topix dropped. For the week, the Nikkei retreated 0.8 percent, while the Topix slipped 0.2 percent.

The Nikkei has fallen 13 percent this year, the most among benchmark indexes in the world’s five-largest developed countries, as the yen strengthened and Europe’s debt crisis and concern about slowing economic growth in China and the U.S. dented confidence in a global recovery.

U.S. Jobs

The decline has cut the average price of stocks in the gauge to 16.4 times estimated earnings, close to the lowest level since December 2008.

The Standard & Poor’s 500 Index slumped 1.7 percent yesterday in New York to the lowest close since July 21.

Labor Department figures showed claims for jobless benefits in the U.S. jumped by 12,000 to 500,000 in the week ended Aug. 14, the highest level since November and more than all 42 estimates by economists surveyed by Bloomberg News. The Federal Reserve Bank of Philadelphia’s factory index unexpectedly fell, signaling contraction, while economists surveyed expected a gain.

“The U.S. economic recovery is slowing,” said Kazuhiro Takahashi, a general manager at Tokyo-based Daiwa Securities Capital Markets Co. “The economy has come to a tipping point -- it will level off or decline.”

Yen, Exporters

Canon, the world’s biggest camera maker, fell 2.2 percent to 3,600 yen. Toyota Motor Corp., the world’s largest carmaker that gets 30 percent of sales in North America, sank 1.8 percent to 3,030 yen and was the heaviest drag on the Topix. Fanuc Ltd., an industrial robot maker that earns almost 80 percent of its revenue abroad, dropped 2.8 percent to 9,360 yen.

The yen strengthened to as much as 85.19 against the dollar today in Tokyo from 85.75 at the close of stock trading yesterday. Against the euro, it appreciated to 109.02 from 109.87. A stronger yen reduces overseas income at Japanese companies when converted into their home currency.

The yen climbed to a 15-year high against the dollar this month and is on course for its strongest annual average level since currencies began trading freely in 1971, according to data compiled by Bloomberg and based on each day’s close.

The Bank of Japan is assessing the economic effect of the yen’s rise to a 15-year high, according to three people familiar with the matter, as speculation mounts that it will consider easing monetary policy.

Sharp Sinks

“If some monetary easing measures are decided, that should support the market,” Daiwa’s Takahashi said.

Sharp sank 2.7 percent to 853 yen, a level not seen since April 2009. The company will reduce LCD panel production this month for components that serve other companies, such as Sony Corp., because of higher television inventories in the U.S. and China, Nikkei English News reported, without saying where it got the information. The lower output may last for one to two months, Nikkei said.

Miyuki Nakayama, a Tokyo-based spokeswoman for Sharp, declined to confirm or deny whether the Osaka-based company plans to cut production.

JSR, a maker of materials for liquid crystal displays, retreated 4.4 percent to 1,318 yen. UBS AG reduced its investment recommendation to “neutral” from “buy” and cut its 12-month share price estimate by 33 percent to 1,400 yen.

Chip Demand

Chip-related companies declined after a Credit Suisse Group AG analyst cut his share price estimates. Advantest Corp., the world’s biggest maker of memory-chip testers, slumped 3.2 percent to 1,722 yen. Dainippon Screen Manufacturing Co., which makes chip-production equipment, lost 2.3 percent to 419 yen. Elpida Memory Inc., Japan’s sole maker of computer-memory chips, dropped 2.7 percent to 1,097 yen.

Nippon Sheet Glass plummeted 6.5 percent to 203 yen, the lowest since March 2009 amid speculation the glassmaker will sell new shares to boost capital.

“There is speculation in the market the company will sell shares,” said Masayoshi Yano, a senior market analyst in Tokyo at Meiwa Securities Co. “People probably sold Nippon Sheet Glass shares as they remember Inpex announced a share sale after market rumors.”

The company’s spokesman Tetsuya Higaki said in a telephone interview the company does not comment on rumors and declined to confirm or deny whether the company plans to sell new shares.

JX Holdings Inc., Japan’s largest oil refiner and copper producer, slumped 3.8 percent to 460 yen. Dowa Holdings Co., which mines, refines and smelts various metal-related products, tumbled 5.3 percent to 451 yen. Mitsubishi Corp., Japan’s largest commodities trader, lost 1.8 percent to 1,889 yen and Mitsui & Co., No. 2, dropped 2.2 percent to 1,173 yen.

Crude oil futures dropped 1.3 percent to $74.43 a barrel in New York yesterday, the lowest settlement price since July 7, on concern a slowing economy will cut demand for energy. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum lost 1.2 percent yesterday.

To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net.

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