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Japanese Stocks Drop as Financials, Communications Fall

Japan’s stocks fell, on low trading volume, as financial services and communication companies slid.

Aplus Financial Co., a credit-card company, dropped 3.1 percent. KLab Inc. fell 3.5 percent, with the social-game operator leading losses on the Topix (TPX) Information & Communication Index. Tokyo Electron Ltd. lost 2.9 percent on a report its tie-up with Applied Materials Inc. received strong opposition from China’s government. Lasertec Corp. advanced 5.1 percent after the maker of microscope parts raised its dividend forecast.

The Topix slid 0.1 percent to 1,272.39 at the close in Tokyo after rising as much as 0.3 percent. Volume was about 15 percent below the 30-day average. The Nikkei 225 Stock Average declined 0.1 percent to 15,328.56, with volume about 16 percent lower. The yen was little changed at 101.42 per dollar after weakening the past three days.

“The yen is slightly strong, and daily trading volume in the Japanese market has remained below 2 trillion yen for some time,” said Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc. “There’s also a wait-and-see mood in the market before earnings in the U.S. and Japan.”

The Topix index surged 12 percent from this year’s lowest level in April. The gauge traded at 1.2 times book value yesterday compared with 2.7 for the Standard and Poor’s 500 Index and 1.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Tokyo Electron lost 2.9 percent to 6,935 yen. The company’s merger with Applied Materials received strong opposition from China’s Ministry of Industry, DealReporter said.

Biggest Drops

Financial firms and communications shares were among the largest declines on the Topix. Aplus Financial fell 3.1 percent to 154 yen and Japan Exchange Group Inc., operator of the nation’s main bourse, lost 2 percent to 2,367 yen. KLab sank 3.5 percent to 1,670 yen, while SoftBank Corp. was the biggest drag on the Topix, declining 1.3 percent to 7,596 yen.

Insurers bucked the trend. T&D Holdings Inc. (8795) climbed 2.1 percent to 1,291.5 yen and Tokio Marine Holdings Inc. rose 0.7 percent to 3,336 yen.

Lasertec jumped 5.1 percent to 1,045 yen on forecasting a 27 yen full-year dividend, up from a previous 20 yen estimate.

Cyberdyne Inc. surged 19 percent to 13,980 yen, a record close, after SMBC Nikko rated shares of the medical equipment researcher outperform in new coverage.

Melco Holdings Inc. gained 0.8 percent to 2,254 yen. The maker of computer equipment reported a tripling in quarterly net income.

Futures on the S&P 500 were little changed today after the U.S. equities benchmark climbed 0.5 percent yesterday to within two points of a record.

U.S. Inflation

The Bank of Japan won’t hesitate to adjust policy if needed, Deputy Governor Hiroshi Nakaso said today in Shizuoka.

Japanese stock rose earlier after U.S. inflation data showed the world’s largest economy is generating little price pressure as growth accelerates. U.S. consumer prices increased 0.3 percent in June after a 0.4 percent gain in May. Sales of previously-owned U.S. homes climbed to an eight-month high, according to a separate report.

Global investors have been scrutinizing U.S. inflation data to determine when the Federal Reserve will begin raising its benchmark interest rate.

The data bolster Fed Chair Janet Yellen’s view that a recent pickup in inflation was temporary and that the U.S. economy would rebound from a first-quarter slump. That means the central bank can keep interest rates low well into 2015 even as it continues to trim bond purchases.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; Yuko Takeo in Tokyo at ytakeo2@bloomberg.net

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

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