Japanese Shares Retreat on Kerry’s Syria Comments, Yen

Japanese shares fell, with the Topix (TPX) index headed for its fifth retreat in six days, as investors shunned risk assets after U.S. Secretary of State John Kerry said Syria will be held accountable for using chemical weapons.

Toyota Motor Corp., Asia’s biggest automaker, declined 1.3 percent as the yen climbed. Sumitomo Rubber Industries Ltd. led a decline by tiremakers. Stanley Electric Co. (6923), which makes car lights, gained 1.4 percent after saying it will buy back stock. Tokyo Electric Power Co., the utility whose shares tumbled 27 percent in six days through yesterday, gained the most on the Nikkei 225 Stock Average after the government said it would take over the handling of radioactive water spills at the Fukushima Dai-Ichi nuclear plant.

The Topix lost 0.4 percent to 1,135.41 as of 9:22 a.m. in Tokyo, with 27 of the 33 industry groups dropping. The Nikkei 225 Stock Average fell 0.6 percent to 13,553.03. The yen gained 0.4 percent against the dollar.

“Investors are going to increasingly take a risk-off stance,” said Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co., a unit of Japan’s second-biggest lender by market value. “But depending on how the yen moves and how the rest of Asia’s stock markets react, Japanese stocks may reverse declines and turn positive.”

Futures on the Standard & Poor’s 500 Index slid 0.1 percent. The gauge yesterday fell 0.4 percent after Kerry said President Barack Obama will hold Syria accountable for the “moral obscenity” of deploying chemical weapons against its people. The measure earlier climbed as investors speculated whether a report showing durable-goods orders declined in July would delay stimulus cuts.

Tapering Speculation

Stocks, bonds and commodities have whipsawed since May, when Federal Reserve Chairman Ben S. Bernanke first signaled the prospect of stimulus cuts if the U.S. economy and job market continues to improve. The Fed will probably pare its $85 billion a month in bond purchases at its Sept. 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg Aug. 9-13.

The Topix traded at 1.19 times book value yesterday, compared with 2.43 for the S&P 500 and 1.71 for the Stoxx Europe 600 Index.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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