Japanese stocks fell, with the Topix Index falling the most since May 18, as more than 900 companies on the Topix trade ex-dividend today, and amid concern stimulus from central banks in the U.S., Europe and Asia won’t do enough to revive global economic growth.
NTN Corp., one of companies on the Topix that is trading without rights to a dividend from today, sank 5.8 percent. Funai Electric Co., an audio-visual equipment maker that gets half its sales from North America, lost 2.7 percent after the president of the Federal Reserve Bank of Philadelphia said more bond purchases by the central bank won’t boost growth. Sony Corp. slid 4.5 percent after Standard & Poor’s cut the consumer-electronics maker’s credit rating.
The Topix fell 2 percent to 742.54 at the 3 p.m. close in Tokyo, with more than twice as many shares declining as advancing. The Nikkei 225 Stock Average lost 2 percent to 8,906.70, with volume 6.8 percent below the 30-day average for the time of day.
“Monetary easing isn’t something that will create demand,” said Goya Nakao, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co., which oversees about 5 trillion yen ($64 billion). “Catalysts for a market rebound are missing. While there’s some improvement in sentiment in Europe after the European Central Bank’s comments on stimulus, the U.S. economy is weakening amid an uncertain outlook and the timing of a rebound in China is being pushed back.”
The Topix has fallen 15 percent from this year’s high on March 27. The decline drove the dividend yield for the gauge up to 2.5 percent, more than three times the rate of the benchmark 10-year government bond. The Standard & Poor’s 500 Index yields just 1.2 times the government 10-year note, while Germany’s DAX offers 2.3 times and Australia’s S&P/ASX 200 pays 1.6 times.
NTN and Nippon Paper Group Inc. are among companies that went ex-dividend today. NTN, a bearing maker planning to pay a first-half dividend of 5 yen per share, lost 5.8 percent to 163 yen. Nippon Paper, which projects an interim dividend of 10 yen, slipped 3.1 percent to 956 yen.
Futures on the S&P 500 added 0.1 percent today. The gauge yesterday fell for a fourth day, retreating 1.1 percent for its biggest decline since June 25, after Federal Reserve Bank of Philadelphia President Charles Plosser said new bond buying announced by the Fed this month probably won’t boost growth or hiring and may jeopardize the central bank’s credibility.
Funai Electric slumped 2.7 percent to 1,079 yen. Hitachi Koki Co., an electric-tools maker that gets 65 percent of its sales overseas, lost 2.8 percent to 596 yen.
Shares also fell after the euro weakened to as low as 99.99 yen today, trading near the lowest level since Sept. 13, before reports that may show declines in Italian retail sales and French consumer confidence. The shared currency was also under pressure as Spanish Prime Minister Mariano Rajoy faced calls for early elections and an international bailout of his nation.
Brother Industries Ltd., an office-equipment maker that counts Europe as its biggest market, lost 2.6 percent to 746 yen. Kyocera Corp., an electronics maker that gets almost 20 percent of its sales in the region, slid 2.2 percent to 6,560 yen.
“We are tactically bearish on risk assets,” Kevin Gaynor, the head of macro-strategy research at Nomura Holdings Inc., Japan’s largest brokerage, said in Sydney today. “Economic growth is going to disappoint substantially over the next three or four months.”
The People’s Bank of China yesterday reiterated it will pursue prudent monetary policy, according to a statement posted to its website following a quarterly meeting of its monetary policy committee.
China’s central bank yesterday added a record 290 billion yuan ($46 billion) to the financial system using reverse-repurchase agreements, seeking to address a cash squeeze in the run-up to a weeklong holiday.
The Bank of Japan’s Tankan report is expected to show the nation’s biggest manufacturers grew more pessimistic this quarter as China’s slowdown and Europe’s crisis sapped exports, putting pressure on the central bank to add to this month’s surprise monetary stimulus.
The Tankan, due on Oct. 1, will show that business confidence deteriorated for the fourth straight quarter, according to the median estimate of 12 analysts in a Bloomberg News survey. That would mark the longest string of negative readings since Japan emerged from the global recession in 2010.
Toyota Motor Corp. fell along with other automakers on mounting concerns about the fallout from a territorial dispute between Asia’s two biggest economies.
Toyota, Asia’s biggest carmaker, slumped 2.7 percent to 3,100 yen, while Nissan Motor Co., the top Japanese seller of vehicles in China, slid 2.6 percent to 664 yen after the two carmakers cut production in China in August after anti-Japanese protesters damped demand in the world’s largest vehicle market.
Sony tumbled 4.5 percent to 925 yen after S&P cut the company’s long-term credit rating one step to BBB, the second-lowest investment grade, on concern the electronics maker’s earnings recovery will lag.
-- With assistance from Adam Haigh in Sydney. Editors: Nick Gentle, Jim Powell