Japanese Shares Fall After Best Month Since 1999

Japanese shares fell, with the Topix (TPX) Index dropping after posting its biggest monthly advance since 1999, as earnings reports from Alps Electric Co. to Tokyo Electron Ltd. disappointed investors.

Alps Electric, a car audio maker, slumped 8.9 percent and semiconductor manufacturer Tokyo Electron dropped 4.1 percent after forecasting profit that missed analyst estimates. Tokyo Electric Power Co., operator of the stricken Fukushima nuclear power plant, slid 3 percent after reporting a loss six times bigger than its forecast. Tokuyama Corp., a chemicals maker, advanced the most on the Nikkei 225 Stock Average after forecasting a return to profit.

The Topix lost 0.6 percent to 1,158.37 at the close of trading in Tokyo, with about nine stocks falling for every seven that rose on the 1,711-member gauge. The measure yesterday capped a 13 percent advance for the month, its best gain since March 1999. The Nikkei 225 slid 0.4 percent to 13,799.35 today.

“With Japanese shares rising this far, there’s going to be some profit taking going on,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees about $34 billion. “With earnings, it’s becoming clearer that there are some companies that cannot be saved just by the weaker yen.”

The Topix advanced 6 percent from mid-November as Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda pledged to defeat 15 years of deflation. Brokerages, real-estate companies and makers of rubber products have led gains among the 33 industries on the gauge.

Relative Value

The Topix traded at 1.3 times book value, compared with 2.4 for the Standard & Poor’s 500 Index and 1.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Of the companies that have reported annual earnings since March 31 and for which Bloomberg has estimates, 150 companies have beaten analyst projections and 114 have fallen short, according to data compiled by Bloomberg.

Alps Electric slumped 8.9 percent to 675 yen, the biggest drop on the Nikkei 225 and its biggest decline since October. The company forecast net income this year of 9.5 billion yen, missing the 10.8 billion yen estimate of 12 analysts surveyed by Bloomberg.

Tokyo Electron, the third-biggest drag on the Nikkei 225, slid 4.1 percent to 4,785 yen after forecasting 13 billion yen in profit this year, below the 16.3 billion yen estimates of analysts before its earnings were announced.

U.S. Futures

Among other stocks that fell, Tokyo Electric Power declined 3 percent to 417 yen, after posting a net loss of 685.3 billion yen for the year ended March. The figure is more than six times worse than the company’s forecast, while also missing the 133 billion yen in analysts’ estimates.

Futures on the S&P 500 were little changed today. The U.S. equity benchmark index closed at another record yesterday as consumer confidence gained and investors bet central banks worldwide will continue their efforts to stimulate the economy.

Among stocks that rose, Tokuyama jumped 8.8 percent to 285 yen as it forecast 7.5 billion yen in net income after posting a 38 billion yen net loss last fiscal year.

Nippon Paper Industries Co. posted the second-biggest gain on the Nikkei 225 and led the pulp and paper sector higher on the Topix Index after Mitsubishi UFJ Morgan Stanley Securities Co. boosted its rating on the stock to outperform. The shares jumped 8.3 percent to 1,573 yen.

The Nikkei Stock Average Volatility Index fell 7.4 percent to 23.39 today, indicating traders expect a swing of about 6.8 percent on the benchmark gauge over the next 30 days. Volume on the gauge was 29 percent below its 30-day average, according to data compiled by Bloomberg.

Markets will be closed in Japan on May 3 and 6 for public holidays.

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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