Most Japan Stocks Fall, Led by Insurers, Consumer Lenders

Most Japanese stocks fell, with the Topix index halting a two-day rally, as insurers and consumer lenders led the decline.

T&D Holdings Inc. lost 2.2 percent, the biggest drop among insurers, while consumer lender Aiful Corp. decreased 2.7 percent. Aderans Co. lost 3.3 percent after the wigmaker’s quarterly net income fell. Samantha Thavasa Japan Ltd., a maker of handbags, gained 7.1 percent after reporting profit jumped.

The Topix (TPX) fell less than 0.1 percent to 1,273.59 at the close in Tokyo after rising as much as 0.4 percent. About nine shares fell for every seven that rose on the measure, with volume 12 percent below the 30-day average. The Nikkei 225 Stock Average dropped 0.1 percent to 15,379.30.

“The market doesn’t have catalysts, with expectations for government measures waning,” said Takuya Takahashi, a senior strategist at Daiwa Securities Group Inc. “Shares continue to adjust after rising last month. I don’t think that will change this week.”

The Topix has gained 0.9 percent this month after rising 5.1 percent in June on optimism that the economy is weathering an April sales-tax increase and Japan’s $1.2 trillion pension fund will buy more domestic stocks. Thirty-two companies on the equity gauge report results this week, according to data compiled by Bloomberg.

The Standard & Poor’s 500 Index fell yesterday as Federal Reserve concerns about valuations of small-cap companies and certain sectors overshadowed bank earnings. Futures on the U.S. stock measure were little changed today.

Fed officials have made cautionary statements about valuations for smaller companies already this year. In February, Fed Governor Daniel Tarullo said surging small caps were one reason policy makers should ensure they weren’t creating systemic risk in financial markets.

Stimulus Outlook

The central bank must press on with monetary stimulus as “significant slack” remains in labor markets and inflation is still below target, Fed Chair Janet Yellen said in semi-annual testimony prepared for delivery to the Senate Banking Committee.

Insurers and consumer lenders fell the most among the 33 Topix industry groups. T&D Holdings lost 2.2 percent to 1,298 yen while Aiful slid 2.7 percent to 623 yen.

Aderans lost 3.3 percent to 1,502 yen, its lowest close since May. Net income for the quarter through May plunged 85 percent to 236 million yen ($2.3 million) from the previous year, the company reported yesterday.

Samantha Thavasa jumped 7.1 percent to 878 yen. The company said quarterly profit jumped 73 percent to 808 million yen from a year earlier amid a 45 percent surge in sales.

IBJ Leasing Co. (8425), which rents machinery, aircraft and computers, advanced 3.5 percent to 2,821 yen. The company was raised to strong buy from above average at Tokai Tokyo Securities Co.

The Topix traded at 1.24 times book value today, compared with multiples of 2.74 on the S&P 500 and 1.85 for the Stoxx Europe 600 Index.

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, Jim Powell

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