Japanese Stocks Retreat Led by Exporters on U.S. Economy

Japanese stocks fell, sending the Nikkei 225 Stock Average to a third straight weekly decline, as reports showed the U.S. economy grew at a slower than estimated rate, reducing the earnings outlook for Japanese exporters.

Canon Inc. (7751), the world’s largest camera maker that gets more than 80 percent of its revenue outside Japan, slid 0.4 percent. Toyota Motor Corp. (7203), the world’s largest carmaker, lost 0.6 percent after the company said its production in Japan declined the most in 35 years in April after the nation’s record earthquake disrupted output. Sony Corp. (6758), Japan’s largest exporter of consumer electronics, retreated 3.2 percent after forecasting profit that missed analysts’ estimates.

The Nikkei 225 fell 0.4 percent to 9,521.94 at the 3 p.m. close in Tokyo. The broader Topix index dropped 0.3 percent to 824.90 with seven stocks retreating for every four that rose. For the week, the Nikkei has lost 0.9 percent, completing its longest streak of weekly losses since October, while the Topix is down 0.4 percent.

“It takes a while to turn bullish,” said Takashi Miyazaki, a senior strategist who helps oversee about $84 billion at Mitsubishi UFJ Asset Management Co. in Tokyo. “Some economic figures were weak because of the disrupted supply chain.”

The Topix has lost 11 percent since March 10, the day before a magnitude-9 earthquake and tsunami devastated Japan’s northeast coast, crippling four of Tokyo Electric Power Co.’s nuclear reactors and disrupting supply chains at companies from Toyota Motor Corp. to chipmaker Renesas Electric Corp. Companies in the Topix traded at an average 0.94 times estimated book value, compared with 2.1 for the Standard & Poor’s 500 Index.

U.S. Economy

Canon dropped 0.4 percent to 3,835 yen. Kyocera Corp., a maker of mobile phones and solar panels that derives more than 20 percent of its sales from the U.S., sank 0.6 percent to 8,400 yen. Fanuc Corp. (6954), an industrial robot maker that gets 75 percent of its revenue outside Japan, slumped 1.2 percent.

In the U.S. economic growth slowed to a 1.8 percent annual rate in the first quarter, reflecting a smaller gain in consumer spending than previously calculated. That compared with a 3.1 percent expansion in the prior quarter, Commerce Department figures showed. The median forecast of economists surveyed by Bloomberg News was for 2.2 percent growth.

Unemployment claims increased by 10,000 to 424,000 last week, Labor Department figures showed. The median estimate of economists was for a drop to 404,000.

Carmakers Retreat

“People are feeling anxious about the outlook of the economy and corporate earnings,” said Masaru Hamasaki, who helps oversee about $18 billion as chief strategist at Toyota Asset Management Co. in Tokyo.

Carmakers were the heaviest drag on the Topix among its 33 industry groups after carmakers said production fell last month. Toyota said domestic production plunged 78 percent, the largest decline since 1976. Japan output at Honda Motor Co. and Nissan Motor Co. fell 81 percent and 49 percent respectively. Toyota shares lost 0.6 percent to 3,335 yen. Honda dropped 0.8 percent to 3,070 yen. Nissan sank 0.5 percent to 796 yen.

Sony slumped 3.2 percent to 2,167 yen, the biggest decline on the Nikkei. The company said its full-year net loss widened to 259.6 billion yen ($3.19 billion) from 40.8 billion yen in the year ended March 31. The company forecast profit of 80 billion yen this fiscal year, lower than the 115.9 billion yen average estimate of 12 analysts surveyed by Bloomberg.

“Even for Sony, it’s difficult to survive a competition in the field of high-tech and home electronics that’s getting severer,” said Masaru Hamasaki, who helps oversee about $18 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “The company was a leader in the industry but it has lacked distinguishing products lately.”

-- Editor: Nick Gentle

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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