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Japanese Stock Futures Gain on U.S. Confidence, Spending

Japanese stocks plunged, with the Nikkei 225 (NKY) Stock Average dropping the most in five months and closing below 10,000 for the first time since March 13, as the U.S. Federal Reserve signaled it may not offer more stimulus and Fast Retailing Co. slid.

Sony Corp., Japan’s biggest exporter of consumer electronics, fell 2.9 percent. Softbank Corp. (9984) lost 2 percent after saying a storm disrupted its phone and e-mail services for customers in Northern Japan. Fast Retailing, Asia’s biggest clothing retailer, sank 5.7 percent after Credit Suisse Group AG said sales at its Uniqlo stores failed to recover from the March 11 earthquake last year.

The Nikkei 225 fell 2.3 percent to 9,819.99 at the 3 p.m. close in Tokyo, with losses accelerating after the gauge slipped below the key level of 10,000 during the morning trading session. All except 11 stocks on the gauge closed lower. Volume was about 8 percent below the 30-day average. The broader Topix Index (VNKY) retreated 1.8 percent to 835.36.

“Today the big question was whether the Nikkei would be able to hold above 10,000,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “Once the market fell below that level, investors started to sell. Negative signals on monetary easing also weighed on stocks.”

Futures on the Standard & Poor’s 500 Index (SPXL1) slid 0.4 percent today. The gauge fell 0.4 percent in New York yesterday as the Federal Reserve said it’s holding off on increasing monetary accommodation and U.S. factory orders climbed less than expected in February.

Exporters Decline

Sony dropped 2.9 percent to 1,657 yen. Canon Inc. (7751), a camera maker that gets almost 30 percent of its sales from the Americas, lost 1.9 percent to 3,900 yen.

Honda Motor Co. (7267) Japan’s second biggest carmaker by market value, dropped 3.1 percent to 3,100 yen after a report its U.S. sales fell 5 percent in March, compared with estimates for a 5 percent gain.

Fast Retailing dropped 5.7 percent to 17,800 yen after Credit Suisse said the clothier’s 5.1 percent rise in domestic same-stores sales last month failed to recover from last year’s earthquake. The Yamaguchi-based retailer is the most heavily weighted stock on the Nikkei 225.

“As Fast Retailing shares slid further, there was concern it would take the Nikkei down another notch by triggering selling in futures,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo.

Softbank, Japan’s third-largest mobile phone company by sales, lost 2 percent to 2,349 yen after saying users in Northern Japan are unable to make calls or send e-mails after widespread storms caused power blackouts.

Asahi Rises

Among shares that gained today, Asahi Group Holdings Ltd. (2502) rallied 2 percent to 1,832 yen, the brewer’s biggest gain in four months. Shares advanced after Molson Coors Brewing Co. (TAP) yesterday agreed to purchase a European beverage company that Asahi was reportedly close to buying.

Credit Suisse said Asahi’s withdrawal from the bidding on Starbev removed concern about the deal’s impact on its earnings. The investment bank maintained its “outperform” rating on the Japanese brewer and said it expects the shares will rise to 2,200 yen in the next 12 months.

The Nikkei Stock Average Volatility Index, a measure of Japanese option prices, leapt 6.9 percent to 20.23 today, suggesting a possible 5.8 percent swing in the Nikkei 225 in the next 30 days.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net. NI CLM NI JAPAN NI ASIA NI JPS NI STK NI MARKETS NI JPSBN

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