Topix Snaps Three-Day Advance on Yen; Paper Makers Drop

Japanese stocks fell, with the Topix (TPX) index snapping a three-day advance, as exporters dropped after the yen extended yesterday’s gains.

Mazda Motor Corp., a carmaker that gets 30 percent of sales in North America, slipped 1 percent. Nippon Paper Industries Co. sank the most on the Nikkei 225 Stock Average after its rating was cut at SMBC Nikko Securities Inc., with the sector leading declines among the 33 Topix industry groups. Mixi Inc. slumped 17 percent after the social-network site operator was downgraded at Goldman Sachs Group Inc.

The Topix decreased 0.5 percent to 1,250.45 at the close in Tokyo, after ending yesterday within 1.5 percent of this year’s peak reached on May 22. All but two of the gauge’s subsectors declined. The Nikkei 225 lost 0.6 percent today to 15,515.06. The yen rose 0.1 percent to trade at 102.72 per dollar after gaining 0.4 percent yesterday. Nikkei 225 futures dropped 0.5 percent in Osaka.

“The yen is rising with short positions being unwound, and that’s causing futures to lead a loss in shares,” said Yutaka Miura, a senior technical analyst at Mizuho Securities Co., a unit of Japan’s third-biggest lender by market value. “We’re probably seeing selling as the market was near its May high.”

The Topix rose 45 percent this year, the most among 24 major developed markets tracked by Bloomberg, as Prime Minister Shinzo Abe and the Bank of Japan seek to end 15 years of deflation. The index traded at 1.27 times book value today, compared with multiples of 2.60 for the Standard & Poor’s 500 Index and 1.75 for the Stoxx Europe 600 Index yesterday.

Exporters to the U.S. dropped as the yen gained. Mazda lost 1 percent to 478 yen. Tokyo Electron Ltd. (8035), a maker of industrial electronics that gets 24 percent of sales in the U.S., fell 2.2 percent to 5,380 yen.

U.S. Budget

Futures on the S&P 500 slipped 0.1 percent today. U.S. lawmakers unveiled an agreement to ease automatic spending cuts by about $63 billion over two years and reduce the deficit by $23 billion, breaking a three-year cycle of fiscal standoffs.

The U.S. equity measure dropped 0.3 percent from a record high yesterday, as investors weighed the budget negotiations and a report showed U.S. job openings climbed to a five-year high in October, spurring concerns the Federal Reserve will cut stimulus sooner than expected.

Fed Tapering

Thirty-four percent of economists surveyed by Bloomberg on Dec. 6 expect the U.S. central bank will begin paring its $85 billion in monthly bond purchases when it meets next week. Janet Yellen, nominated to replace Ben S. Bernanke as Fed chief when he exits at the end of January, has said premature tapering will put the recovery at risk.

Core machine orders in Japan, an indicator of future capital spending, rose 0.6 percent in October from the previous month, the Cabinet Office said today in Tokyo. Economists surveyed by Bloomberg had expected a 0.7 percent increase. The government upgraded its assessment to say “orders are in a moderate rising trend,” having last used this phrasing from February to May 2012.

Paper companies fell, with Nippon Paper (3863) sliding 4.4 percent to 1,891 yen. Mitsubishi Paper Mills Ltd. decreased 3.2 percent to 90 yen as its target price was cut to 90 yen from 115 yen at SMBC Nikko Securities. Hokuetsu Kishu Paper Co. dropped 2.5 percent to 471 yen after the brokerage also lowered the stock’s target price to 460 yen from 530 yen.

Mixi slumped 17 percent to 7,560 yen at the close after being untraded throughout the day. Goldman Sachs cut Mixi’s rating to sell from neutral, saying the shares have risen too high. The stock had risen 661 percent from Nov. 19 through yesterday.

Gree Inc. climbed 2.3 percent to 1,165 yen, paring gains of as much as 20 percent, after Goldman Sachs raised its outlook on the mobile-gaming company on wider-than-expected cost cuts.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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