Topix Follows U.S. Stocks Lower on Stronger Yen, SoftBank

Japan’s Topix index fell the most in more than two weeks as a selloff in technology shares continued in Asia and the yen gained against the dollar.

SoftBank Corp. sank 4.6 percent, its steepest decline since Feb. 3. Otsuka Corp. (4768) dropped 2.6 percent after Goldman Sachs Group Inc. cut its rating on the software developer. Daiichi Sankyo Co. jumped 3.3 percent after Indian drugmaker Sun Pharmaceutical Industries Ltd. agreed to buy Ranbaxy Laboratories Ltd. Daiichi Sankyo, which owns 63.5 percent of Ranbaxy, said it will vote in favor of the acquisition.

The Topix declined 1.6 percent to 1,196.84 at the close in Tokyo, its biggest drop since March 20. Volume was 19 percent below the 30-day average. The Nikkei 225 Stock Average slid 1.7 percent to 14,808.85. The Standard & Poor’s 500 Index sank 1.3 percent on April 4, even as data showed U.S. employers boosted payrolls. The yen gained 0.2 percent versus the greenback today after rising 0.6 percent on April 4. The Bank of Japan began a two-day policy meeting today.

“Japanese stocks are following the loss in U.S. shares as the yen was bought amid risk-off sentiment,” said Ichiro Yamada, general manager of equities at Fukoku Mutual Life Insurance Co. “The jobs report was solid even though it missed estimates. The concern is over U.S. corporate earnings, especially in the technology sector that led the rally.”

Futures on the S&P 500 sank 0.3 percent today. The Nasdaq Composite Index slumped 2.6 percent on April 4, the most since Feb. 3, after large technology stocks from Google Inc. to Yahoo Inc. plunged.

Jobs Report

U.S. equities earlier climbed to all-time highs after the release of the jobs data. Payrolls rose 192,000, short of the median forecast in a Bloomberg survey of economists for a 200,000 gain. The unemployment rate held at 6.7 percent even as more Americans entered the labor force. Employment in January and February was revised higher, showing the effect on the labor market from inclement winter weather was less severe than previously thought.

Japanese technology companies fell, following their U.S. counterparts lower. SoftBank plunged 4.6 percent to 7,556 yen. Rakuten Inc., an online retailer, lost 4.9 percent to 1,349 yen.

Yahoo Japan Corp., an Internet portal-site operator, declined 5.6 percent to 485 yen for the biggest drop on the Nikkei 225.

Otsuka slid 2.6 percent to 12,850 yen after Goldman Sachs cut its rating to sell from neutral.

JPX Drops

Financial shares retreated. Japan Exchange Group Inc. slumped 4.7 percent to 2,459 yen. The Tokyo bourse operator led losses as the Topix (TPX) Other Financing Business Index fell the most among the broader gauge’s 33 industry groups. Banks were the biggest contributor to the Topix’s decline.

Exporters slid. Honda Motor Co. sank 2.8 percent to 3,571 yen. Olympus Corp., which makes endoscopes, fell 3.2 percent to 3,175 yen.

Among shares that advanced, Daiichi Sankyo rose 3.3 percent to 1,813 yen. Sun Pharmaceutical agreed to buy Ranbaxy Laboratories for $3.2 billion in stock. Ranbaxy has had four of its Indian plants banned by the Food and Drug Administration from exporting to the U.S. for failing to meet standards.

The Topix Mining Index was the only subsector to rise. Japan Petroleum Exploration Co. climbed 2.3 percent to 3,565 yen for the biggest advance among its members. The company will start commercial production of shale oil in the current fiscal year, Kyodo News reported.

The BOJ is forecast to leave unchanged a 60 trillion yen to 70 trillion yen ($679 billion) target for yearly expansion of the monetary base when it issues its policy decision tomorrow. The central bank will probably double purchases of exchange-traded funds to 2 trillion yen in a second round of monetary easing under Governor Haruhiko Kuroda anticipated in coming months, according to economists surveyed by Bloomberg News.

The Topix traded at 1.17 times book value today, compared with 2.61 for the S&P 500 and 1.91 for the Stoxx Europe 600 Index as of last week.

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

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

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