Japan Stocks Snap Five-Day Loss as Yen Retreats

Japanese shares fell, with the Nikkei 225 (NKY) Stock Average extending its losing streak to the longest since 2009, after the Bank of Japan refrained from additional stimulus today and the yen rose against the dollar, dimming the earnings outlook for the nation’s exporters.

Sony Corp., the money-losing electronics maker which yesterday said it will cut 10,000 jobs, extended declines as the yen strengthened after the BOJ’s announcement. Sharp Corp. (6753), the nation’s largest maker of liquid-crystal displays, dropped 4.3 percent after a report its loss could widen on poor sales of TVs and solar cells, according to the Nikkei newspaper. Kansai Electric Power Co. advanced 3.4 percent after a report the prime minister “basically” approved safety measures for its nuclear reactors, moving a step closer to restarting the facilities.

The Nikkei 225 fell 0.1 percent to 9,538.02 at the 3 p.m. close in Tokyo, dropping for a sixth day, the longest run of declines since July 2009. Volume on the gauge was 14 percent below the 30-day average. The broader Topix Index was little changed at 813.43, paring gains of as much as 1 percent after no additional monetary easing was announced at today’s BOJ meeting.

“The market is calling for action from the BOJ,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, which manages about $123 billion. “The bank’s policy makers might have reached a consensus to do something at the next meeting. Political pressure is backing them into a corner and will force them to act.”

Futures on the Standard & Poor’s 500 Index (SPXL1) added 0.3 percent today. The gauge slid 1.1 percent in New York yesterday after a report showed U.S. employers in March added the fewest jobs in five months.

Topix Performance

The Topix gained about 12 percent this year on optimism the central bank will introduce more measures to spur growth and that reconstruction after last year’s disasters will escalate.

Exporters’ shares fell as the yen rose against the dollar after the BOJ said no additional stimulus measures were proposed at today’s meeting. The central bank kept its key rate near zero and left its asset-purchase fund unchanged after boosting the program in February, a move that drove down Japan’s currency and lifted stocks.

Sony, Japan’s biggest producer of consumer electronics, lost 3.5 percent to 1,586 yen. Canon Inc. (7751), the world’s biggest camera maker, slid 0.8 percent to 3,750 yen, after rising as much as 0.3 percent earlier in the day.

Sharp fell 4.3 percent to 530 yen after the Nikkei reported the electronics maker’s net loss could increase to 390 billion yen ($4.8 billion) in the year ended on March 31 due to sluggish sales. The newspaper also reported Hon Hai Precision Industry Co. will gain a controlling stake in Sharp’s cutting-edge display factory near Osaka.

Kansai Electric Advances

Kansai Electric Power added 3.4 percent to 1,351 yen as Prime Minister Yoshihiko Noda held talks last night on switching on the utility’s two reactors that have passed stress tests. Noda’s group “basically” approved the company’s safety measures, the Nikkei reported today, citing Industry Minister Yukio Edano.

Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, rose after Nomura Holdings Inc. raised target prices in the sector, citing rising sales at home and in the U.S. and Southeast Asia. Toyota gained 1.5 percent to 3,360 yen. Honda Motor Co. (7267) climbed 0.5 percent to 2,952 yen, paring its earlier gain of 2.5 percent.

Shares on the Topix are valued at one times book value, compared with 2.25 times for the S&P 500 and 1.43 times for the Stoxx Europe 600 Index.

The Nikkei 225 Volatility Index (VNKY) fell 2.5 percent to 19.87, indicating traders expect a swing of about 5.7 percent on the benchmark gauge over the next 30 days.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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