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Most Japan Stocks Fall, Led by Utilities; Yen Spurs Nikon

Most Japanese stocks fell, led by nuclear-power generators. The declines were limited as exporters climbed after the yen touched a three-month low amid speculation the central bank will add to stimulus programs.

Kansai Electric Power Co. (9503), Japan’s second-biggest generation company by revenue, sank 13 percent on a report the utility won’t pay a dividend for the first time in 61 years. GS Yuasa Corp. plunged 13 percent after the battery maker cut its earnings forecast. Nikon Corp., a camera maker that gets about 85 percent of its sales overseas, rose 1.6 percent after the yen briefly weakened below 80 against the dollar, boosting the earnings outlook for the exporter.

The Topix Index slid 0.6 percent to 749.37 at the 3 p.m. close in Tokyo, retreating for a second day after the gauge last week recording its biggest weekly gain since Dec. 2. More than two shares dropped for each that gained. The Nikkei 225 Stock Average (NKY) added less than 0.1 percent to 9,014.25, after rising as much as 0.7 percent. Volume on the gauge was almost 10 percent above the 30-day average.

“Long-term investors are taking a wait-and-see stance as earnings momentum is getting sluggish,” said Kenichi Kubo, a senior fund manager at Tokio Marine Asset Management Co., which oversees 5.6 trillion yen ($70 billion). “Some investors are selling shares to lock in profit after gauges rose close to the peaks of August and September.”

Companies in the Nikkei 225 report an average of 28 percent of sales from outside Japan, according to data compiled by Bloomberg. Members of the Topix get 13 percent of sales from overseas, the data show.

Stimulus Measures

The Nikkei 225 has risen 3.8 percent since Sept. 6, as the European Central Bank, the U.S. Federal Reserve and the Bank of Japan adding to measures designed to boost growth. Shares on the stock gauge traded at 1.2 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Europe Stoxx 600 Index.

Japan’s current earnings season peaks next week, with 570 of the 1,672 Topix companies reporting results. Nintendo Co. and steelmaker JFE Holdings Inc. are among 124 companies scheduled to post this week.

Kansai Electric tumbled 13 percent to 595 yen after the Nikkei newspaper reported the utility won’t pay an annual dividend for the first time since fiscal 1951, as earnings are unlikely to recover on rising costs of fuel to cover halted nuclear reactors. Kansai Electric said in a release it hasn’t decided on the year-end dividend payout. Utilities declined the most in the Topix’s 33 industry group.

GS Yuasa (6674) plunged 13 percent to 314 yen, the biggest drop since June 2009, after cutting its net-income forecast by 39 percent to 8 billion yen for the year ending March 31, hurt by a plunge in sales of lithium ion batteries used for electric cars.

Yen Falls

The yen depreciated to as low as 80.01 against the dollar today in Tokyo, the weakest level since July 6. Against the euro, Japan’s currency touched to 104.59, the lowest level since May. A weaker yen boosts the value of overseas income at Japanese companies when repatriated.

Nikon gained 1.6 percent to 2,044 yen. Fanuc Corp. (6954), the world’s biggest maker of factory robotics, climbed 1.9 percent to 13,200 yen.

“The yen is likely to remain weak until the Bank of Japan’s Oct. 30 meeting on expectations the central bank will add stimulus,” said Tokio Marine Asset Management’s Kubo.

Japan may extend its dollar-loan program beyond March 31 to help companies like Softbank Corp. buy overseas assets and stem the yen’s rise, Vice-Finance Minister Tsutomu Okubo said in an interview yesterday in Tokyo.

The Nikkei Stock Average Volatility Index (VNKY) advanced 3.8 percent to 19.75, indicating that traders expect a swing of 5.7 percent on the equity benchmark in the next 30 days.

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

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

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