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Japan Stocks Snap Two-Day Gain as Exports Slow Amid Debt Crisis

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Jan. 12 (Bloomberg) -- Japanese stocks fell, snapping a two-day advance, as weaker exports and a shrinking German economy added to concern the global economy is slowing.

Canon Inc., a camera maker that gets a third of its revenue in Europe, fell 0.9 percent after a report Japan’s trade surplus narrowed on a stronger yen and weak overseas demand. Brokerages led declines after Nomura Holdings Inc. said individual investors are buying fewer stocks. Komatsu Ltd., a construction machinery maker that relies on China for 23 percent of its sales, rose 2.7 percent after slowing mainland inflation raised expectations the government will take action to encourage growth.

The Nikkei 225 Stock Average fell 0.7 percent to 8,385.59 at the 3 p.m. trading close in Tokyo. The broader Topix Index lost 0.9 percent to 727.15 with about four stocks falling for each that rose.

“Europe’s economy probably contracted last quarter and will keep shrinking this quarter,” said Takeru Ogihara, chief strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “A strong yen is weighing on Japan’s stocks, especially export-related shares.”

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge rose less than 0.1 percent in New York yesterday after climbing 1.1 percent over the previous two days on data showing a rise in hiring.

Germany’s gross domestic product contracted about 0.25 percent in the fourth quarter from the previous three months, the government said yesterday, adding to signs Europe’s largest economy may be on the brink of recession.

Japan Surplus Shrinks

Exporters slid after the Finance Ministry said today that Japan’s current-account surplus narrowed 86 percent from a year earlier to 138.5 billion yen ($1.8 billion). The yen traded at 97.77 against the euro today after reaching 97.28 on Jan. 9, its highest since December 2000. A stronger yen hurts Japanese manufacturers by eroding overseas profits.

Canon lost 0.9 percent to 3,255 yen. Mazda Motor Corp., an automaker that gets 72 percent of its sales abroad, dropped 2.3 percent to 128 yen.

Securities firms fell after Nomura said total turnover by individual investors on Japan’s biggest exchanges fell 3.4 percent to 7.6 trillion yen in December from the previous month.

Nomura, Japan’s largest brokerage, fell 3.5 percent to 250 yen. Tokai Tokyo Financial Holdings Inc. slid 3.7 percent to 207 yen, while Okasan Securities Group Inc. lost 3.2 percent to 241 yen.

Natural Disasters, Meltdowns

Japanese stocks tumbled last year amid a strengthening yen, natural disasters and nuclear meltdowns at Tokyo Electric Power Co.’s Fukushima plant. The Topix dropped 19 percent in 2011, the biggest yearly decline since 2008, exceeding an 11 percent decline on the Stoxx Europe 600 Index that tracks companies at the epicenter of the region’s debt crisis.

Shares on the Topix are valued at 0.88 times book value, near the lowest since March 2009. A number below one means investors can buy companies for less than the value of their assets.

“This is a great time to be going out and finding a lot of cheap companies that will do well over the longer term,” Edwin Merner, president of Tokyo-based Atlantis Investment Research Corp., told Susan Li today on Bloomberg Television’s “First Up.” “This isn’t much of a trading market but for fundamentalists like myself there’s a lot of gold out there, it’s just a matter of finding it.”

Fast Retailing Co., Asian’s biggest apparel chain, was among 26 companies listed on the Topix set to post earnings today. After the market closed, Fast Retailing reported a 37 percent increase in net income to 31.1 billion yen in the quarter ended Nov. 30. The stock fell 0.5 percent to 14,520 yen.

Of 1,584 companies on the gauge that reported last quarter, 191 beat analysts’ estimates and 239 missed expectations, according to data compiled by Bloomberg.

Exporters to China gained after inflation cooled for the fifth straight month in December, increasing the odds the government will unveil more measures to prop up growth. Consumer prices rose 4.1 percent in December from a year earlier, the National Bureau of Statistics said in Beijing today, down from 4.2 percent the month before.

Komatsu, Japan’s biggest maker of construction equipment, rose 2.7 percent to 1,902 yen. Hitachi Construction Machinery Co., which counts China as its biggest market, gained 0.7 percent to 1,321 yen.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at

To contact the editor responsible for this story: Nick Gentle at

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