Japan Stocks Fall on Euro Concern, Pare Declines on BOJ

Japanese shares fell on concern a bailout plan for Cyprus will set a precedent for losses on bank deposits in other European nations. Exporters pared declines after the yen weakened as the Bank of Japan (8301) governor outlined monetary easing steps.

Konica Minolta Holdings Inc., a lensmaker that gets 28 percent of sales from Europe, fell 6 percent to lead losses on the Nikkei 225 Stock Average. Toyota Motor Corp., the world’s biggest carmaker, slid 0.2 percent after falling as much as 1.6 percent. Softbank Corp., Japan’s third-biggest mobile operator, rose 2.8 percent after saying it will raise a stake in games developer Gungho Online Entertainment Inc. NEC Corp. jumped 4.1 percent after Reuters reported the maker of telecommunications gear will sell its stake in unit NEC Mobiling Ltd.

The Nikkei 225 slid 0.6 percent to 12,471.62 at the close in Tokyo, with volume 20 percent below the 30-day average. The broader Topix Index declined 0.3 percent to 1,044.42, with about as many stocks falling as rising.

Risk aversion “is spreading because of the Cyprus problem,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about 498 billion yen ($5.3 billion). “Investors are closely watching to see what kind of monetary easing details come out from the BOJ, and they’re expecting further measures.”

The Topix rallied 45 percent from Nov. 14, when elections were announced that brought Prime Minister Shinzo Abe to power on a platform of increased stimulus and central bank easing. The gauge is trading at 1.2 times book value, compared with 2.2 times net assets for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Easing Expectations

The yen weakened after Bank of Japan Governor Haruhiko Kuroda told parliament today that he will consider buying more government bonds with longer maturities and vowed to consider scrapping a self-imposed rule limiting the scale of asset buying. Yields on 10-year government bonds fell to the lowest since June 2003. The Bank of Japan has its next policy meeting April 3-4.

The yen was little changed against the dollar after rising as much as 0.3 percent. Japan’s currency was 0.2 percent weaker against the euro, trading at 121.27.

Toyota fell 0.2 percent to 4,910 yen. Electronics-maker Panasonic Corp. fell 0.4 percent to 673 yen, paring a decline of as much as 1.5 percent.

Cyprus Aid

Cyprus agreed yesterday to the outline of an aid package that imposes losses that two European Union officials said would be as much as 40 percent on uninsured depositors at Bank of Cyprus Plc. Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of 17 euro finance ministers, said the bailout should be viewed as a template for solving banking problems in the region, Reuters reported.

Konica Minolta slumped 6 percent to 705 yen, its biggest drop since October 2011. Trend Micro Inc., a maker of antivirus software that gets 17 percent of its sales from Europe, declined 3.1 percent to 2,689 yen.

Softbank rose 2.5 percent to 3,975 yen, its highest level since 2006. The carrier will spend as much as 25 billion yen to raise its stake in Gungho, which has surged 380 percent this year on the rising popularity of its “Puzzle & Dragons” game.

NEC rose 4.1 percent to 253 yen, the biggest gain on the Nikkei. The company plans to sell its majority stake in NEC Mobiling for 70 billion to 80 billion yen, Reuters reported. The unit’s shares jumped 15 percent to 5,510 yen.

The Nikkei Stock Average Volatility Index (VNKY) gained 2.6 percent to 26.33 today, indicating traders expect a swing of about 7.5 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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