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Japanese Stocks Erase Advance on Global Slowdown Concern

Oct. 2 (Bloomberg) -- Japanese stocks fell amid concerns a global economic slowdown will weigh on earnings. Shares gained earlier after U.S. manufacturing data beat estimates and Federal Reserve Chairman Ben S. Bernanke renewed a pledge to sustain stimulus.

Alps Electric Co. and unit Alpine Electronics Inc. each plunged more than 12 percent after cutting earnings estimates. Mobile-carriers NTT DoCoMo Inc. and KDDI Corp. dropped after rival Softbank Corp. (9984) announced plans to buy eAccess Ltd. Nintendo Co., a maker of gaming consoles that depends on the Americas for 39 percent of its sales, gained 4.3 percent.

The Nikkei 225 (NKY) Stock Average fell 0.1 percent to 8,786.05 at the 3 p.m. close in Tokyo after rising as much as 0.5 percent. The broader Topix Index slid 0.2 percent to 731.19, with 21 of its 33 industry groups dropping. Trading volume on the Nikkei 225 was about 16 percent below the 30-day average as markets in China and Hong Kong were shut for a holiday.

“The market sentiment isn’t good or reacting to positives much,” said Hiroshi Fujimoto, a fund manager at Tokyo-based Shinkin Asset Management Co., which oversees the equivalent of $6.4 billion. “As the global outlook worsens, investors are getting cautious about declines in corporate earnings.”

The Topix has risen 0.4 percent this year as a series of stimulus measures countered a slowdown in the global economy. Stocks on the measure are valued at 12.7 times estimated earnings on average, compared with 14 times for the Standard & Poor’s 500 Index and 12 times for the Stoxx Europe 600 Index.

BOJ Outlook

The Bank of Japan in September unexpectedly boosted its asset-purchase program by 10 trillion yen to 55 trillion yen. Pressure is mounting on the central bank, which is meeting this week, to do more after its Tankan survey yesterday showed deepening pessimistic among manufacturers. Newly appointed Economy Minister Seiji Maehara pledged a closer watch to make sure a 1 percent inflation goal is met.

Alps Electric and Alpine Electronics dropped the most on the Topix after reducing their earnings forecasts yesterday. Alps needs to show a clear path to higher sales and earnings in the touch-panel business, according to Credit Suisse Group AG. Alps plunged 12.4 percent to 352 yen, while Alpine lost 12.2 percent to 621 yen.

Earnings season in Japan starts this month with 139 companies set to report results on Oct. 26, according to data compiled by Bloomberg. A global economic slowdown coupled with a strong yen are adding pressure to Japanese companies, which are still recovering from last year’s record earthquake and nuclear disaster as well as Thailand’s floods.

Bernanke Comments

Futures on the S&P 500 (SPXL1) added 0.2 percent today. The gauge climbed 0.3 percent in New York yesterday as the Institute for Supply Management’s factory index climbed to 51.5 last month from 49.6 in August. Shares also rose yesterday after Bernanke defended the Fed’s unprecedented bond buying, saying it will spur growth, cut unemployment and support the dollar.

“Bernanke is communicating well with the market, and he’s not going to say anything that may damp expectations for policy easing,” said Akihiro Tsunoda, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co., which manages about 5 trillion yen ($64 billion) in assets. “It’s about the time for Japanese stocks to bottom, but there isn’t enough momentum to surge more than 1 percent.”

Companies that do business in the U.S. gained. Nintendo climbed 4.3 percent to 10,450 yen in Osaka. Toyota Motor Corp. (7203), a carmaker that gets a quarter of its sales in North America, gained 0.2 percent to 2,994 yen in Tokyo.

Softbank, Japan’s third-largest mobile carrier, said it will buy eAccess for 52,000 yen a share, valuing the telecom at about 180 billion yen ($2.3 billion). Softbank aims use the acquisition to boost bandwidth speed and capacity after it began selling Apple Inc.’s iPhone 5. The deal will help the carrier compete against bigger rivals NTT DoCoMo Inc. and KDDI Corp., Softbank President Masayoshi Son said yesterday.

Softbank advanced 2.9 percent to 3,195 yen. NTT DoCoMo slid 1 percent to 125,400 yen, while KDDI lost 2.3 percent to 5,850 yen.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

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