Japanese stocks fell a seventh day, with the Nikkei 225 Stock Average extending its longest losing streak since 2009, after Spanish bond yields surged to levels that prompted other euro members to seek bailouts. Sony Corp. plunged after posting a record loss.
Mazda Motor Corp., an automaker that gets almost a fifth of its sales in Europe, dropped 2.2 percent. Mitsubishi UFJ Financial Group Inc. paced losses among banking shares on concern Europe’s crisis will further damage the global financial system. Sony plunged 4.5 percent after its loss was twice as big as forecast on a writedown of deferred tax assets.
The Nikkei 225 fell 0.8 percent to 9,458.74 as of 3:12 p.m. in Tokyo, with almost eight stocks falling for each that rose. The broader Topix Index dropped 0.9 percent to 805.84, with about three shares rising for each that fell.
“The current situation is quite similiar to 2009,” said Makoto Kikuchi, chief executive officer at Tokyo-based Myojo Asset Management Japan Co., describing a period when investors were unsure of the rebound. “Once the market bottoms, those investors will rush to the market, trying not to miss the rally as they did after 2009’s losing streak.”
The Topix gained about 11 percent this year on optimism the Bank of Japan will introduce more measures to spur growth after boosting its asset-purchase program in February and that reconstruction after last year’s disasters will escalate.
All of the gauge’s 33 industry groups declined. Stocks extended losses from yesterday when the Bank of Japan refrained from adding more stimulus, driving the yen higher.
The last time the Nikkei 225 experienced a losing streak in excess of six days was in July 2009, when it fell 9.1 percent over nine days. That drop coincided with a strengthening yen and a period of political uncertainty ahead of elections that saw the country’s Liberal Democratic Party lose its grip on power after a half century of almost unbroken rule.
The gauge has declined 6.4 percent since April 2 as renewed concern about Europe’s debt crisis and warnings from the U.S. Federal Reserve about continued weakness in the world’s largest economy have undermined the global demand outlook. Japan’s currency has surged 2.6 percent against the U.S. dollar this month amid renewed demand for a safe haven, damping the earnings outlook for exporters.
Futures on the Standard & Poor’s 500 Index rose 0.4 percent today. The gauge fell 1.7 percent in New York yesterday as Spanish bonds slumped after Economy Minister Luis de Guindos declined to rule out a rescue. The Bank of Spain said the nation’s lenders may need extra capital if the economy weakens more than expected.
Stocks linked to Europe slipped, with Mazda retreating 2.2 percent to 131 yen. Shimano Inc., a maker of bicycle parts that generates 36 percent of its revenue in the region, lost 1.3 percent to 4,660 yen in Osaka. Canon Inc., the camera maker that counts Europe as its biggest market, dropped 0.4 percent to 3,735 yen.
“Tougher austerity measures are taking a toll on the Spanish economy,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “We don’t see risk aversion coming to a halt, and circumstances are getting chaotic. The markets are calling for policy action.”
Financial stocks fell on concern the debt crisis would spread. Mitsubishi UFJ slid 1 percent to 390 yen. Nomura Holdings Inc., the nation’s biggest brokerage, fell 2.8 percent to 342 yen.
Exporters also fell as the yen rose against all of its 16 major counterparts yesterday, damping the outlook for Japanese earnings abroad. The yen touched 80.62 against the dollar today, the highest since March 7, while reaching 105.45 per euro, the strongest since Feb. 22.
The value of the Nikkei 225 reached 11.8 times that of the broader Topix on April 2, the highest since 2000. The ratio has narrowed as investors shift to domestic-focused companies from exporters on expectations the yen will rally.
Shares on the Topix are valued at 0.99 times book value, compared with 1.36 times for the MSCI Asia Pacific Index, 2.21 times for the S&P 500 and 1.39 times for the Stoxx Europe 600 Index. A number below one means that investors can buy companies for less than the value of their assets.
Machinery makers rose after a report showed today Japan’s orders in the sector unexpectedly climbed in February. Fanuc Corp., the world’s biggest maker of controls for machinery tools, gained 1.9 percent to 14,220 yen. Okuma Corp. added 1.1 percent to 632 yen.
Sony’s Record Loss
Sony dropped 4.5 percent to 1,515 yen after yesterday reporting a record loss of 520 billion yen ($6.4 billion) for the year ended March 31. Earnings were hurt by plans to take a 300 billion yen charge to writedown assets as well as falling global TV shipments. Sharp Corp., Japan’s largest maker of liquid-crystal displays, fell 3.2 percent to 513 yen after reporting a record full-year loss of 380 billion yen.
Among stocks that rose, Chiyoda Co. gained 7.4 percent to 1,738 yen. The specialty retailer said net income surged to 4.84 billion yen in the year ended Feb. 29 from 1.05 billion yen a year earlier, citing cost cuts and streamlining of unprofitable stores. The company forecast profit will rise 19 percent to 5.78 billion yen this fiscal year.
The Nikkei 225 Volatility Index advanced 6.4 percent to 21.15, indicating traders expect a swing of about 6.1 percent on the benchmark gauge over the next 30 days. Trading volume was 14 percent above the 10-day average.