Japanese Stocks Decline as Fanuc Retreats on Earnings

Japanese shares declined, with the Nikkei 225 (NKY) Stock Average retreating after capping its longest streak of weekly gains since 1970, as Fanuc Corp. (6954) and Advantest Corp. (6857) led declines on earnings concerns.

Factory-robotics maker Fanuc sank 7 percent after lowering its profit outlook. Advantest dropped 5.3 percent on a report the world’s biggest maker of memory-chip testers will miss its operating profit forecast. Toyota Motor Corp. lost 0.6 percent even after reporting global sales rose last year. Nintendo Co. gained 3 percent while Sony Corp. surged 9.1 percent after the China Daily newspaper said the country may lift a ban on imports of game consoles.

The Nikkei 225 fell 0.9 percent to 10,824.31 at the close of trading in Tokyo after earlier gaining 0.7 percent. The measure capped an 11-week advance on Jan. 25, the longest such streak in 43 years. The broader Topix Index, which is the most sensitive to swings in the yen since at least 1994, fell 0.4 percent to 913.78.

“I’m still optimistic about the future of stocks,” said Masayuki Kubota, who oversees the equivalent of $1.8 billion at Daiwa SB Investments Ltd. in Tokyo. “The yen is weakening as policy makers take economic stimulus measures, U.S. economic data is likely to be strong and China’s economy is recovering. But in the short-term, investors are looking at bad earnings results as a reason to sell, especially as stocks rose a bit too fast in such a short space of time.”

The Topix has risen 27 percent since elections were announced on Nov. 14 through Jan. 25 on optimism Prime Minister Shinzo Abe’s new government will take the necessary steps to fight deflation. The gauge is trading at 1.09 times book value, compared with 2.07 for the Standard & Poor’s 500 Index and 1.16 for the Stoxx Europe 600 Index.

U.S. Stocks

Futures on the S&P 500 rose 0.1 percent today. The measure gained 0.5 percent on Jan. 25 amid better-than-estimated corporate earnings, rising an eighth day to cap its longest winning streak since 2004.

Fanuc sank 7 percent, the biggest decline on the Nikkei 225, after the company cut its operating profit forecast by 13 percent to 178 billion yen after export competitiveness was hurt by the “superstrong” Japanese currency.

Advantest declined 5.3 percent, the second-biggest decline on equity benchmark, after the Nikkei newspaper reported the company is likely to miss its operating profit forecast due to fewer orders from Apple Inc. suppliers and weaker PC demand.

Kansai Electric Drops

Also among shares that fell, Kansai Electric Power Co. lost 0.4 percent after broadcaster NHK reported that Japan’s nuclear agency will warn that a fault under a Japan Atomic Power Co. reactor may be active, with Kansai Electric holding a stake in the utility.

For stocks that gained, console-maker Nintendo advanced 3.4 percent to 9,630 yen while PlayStation 3 manufacturer Sony jumped 9.1 percent to 1,407 yen, the biggest support on the Topix. China is considering lifting a ban on the manufacture, sale and import of game consoles that has been in place since the year 2000, China Daily reported, citing an unidentified government official.

Takeda Pharmaceutical Co. gained 1.4 percent after winning U.S. clearance for its alogliptin diabetes treatment.

The Nikkei Stock Average Volatility Index rose 7.3 percent to 23.81, indicating traders expect a swing of about 6.9 percent on the benchmark gauge over the next 30 days.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

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