Japanese stocks fell, with the Topix Index erasing yesterday’s advance, as the yen climbed after Group of Seven officials gave conflicting signals about the currency’s volatility. Gree Inc. plunged after cutting its profit forecast.
Toyota Motor Corp., the world’s biggest auto manufacturer, lost 1.8 percent. Gree slumped 15 percent after reducing its outlook on delays to new social-networking games. Pioneer Corp., a maker of audio equipment, plunged 11 percent after forecasting a loss. Daikin Industries Ltd. lost 6.1 percent as the maker of air conditioners was cut to underperform from outperform at CLSA after net income fell.
The Nikkei 225 Stock Average slid 1 percent to close at 11,251.41 in Tokyo, with trading volume 10 percent above the 30-day average. The broader Topix fell 1.2 percent to 957.02, with more than six stocks dropping for each that gained, eliminating yesterday’s 1.2 percent gain.
“The market has been at a high level and investors want to sell shares to lock in profit,” said Kazuyuki Terao, Tokyo-based chief investment officer of Allianz Global Investors Japan Co., part of Allianz Global Investors which oversees about 302 billion euros ($406 billion). “When you look at earnings results, you see many companies doing not so well regardless of a weaker yen.”
The Topix surged about 32 percent since elections were announced on Nov. 14 amid optimism a new government will take aggressive steps to weaken the yen and beat deflation. The gauge is trading at 1.1 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index.
Japan gross domestic product data due tomorrow is expected to show annualized 0.4 percent growth in the three months through December, according to the median forecast in a survey of 32 economists. An expansion would lift the country out of its third technical recession in the past five years. The Bank of Japan will conclude a two-day policy meeting tomorrow.
The yen climbed against all its major peers yesterday after an unidentified G-7 official said Japan will be discussed at the G-20 later this week in Moscow on concern the currency’s decline has been excessive. A stronger yen cuts the value of overseas earnings at Japanese exporters.
Toyota slid 1.8 percent to 4,830 yen. Mazda Motor Corp., an automaker that gets 28 percent of its sales in North America, dropped 2.8 percent to 283 yen. Kawasaki Kisen Kaisha Ltd. led declines among shippers, falling 5.2 percent to 184 yen.
Of the 238 companies on the Topix that have reported earnings so far this quarter and for which Bloomberg has estimates, 63 percent have exceeded profit expectations. Some 53 percent missed sales projections, the data show.
Gree fell 15 percent to 1,150 yen, the biggest decline in nine months. The social-network provider cut its profit target on new game delays and slower-than-expected overseas sales.
Pioneer plunged 11 percent to 201 yen, capping the biggest drop since March 2011, after reversing its forecast to a 4 billion yen loss from a 1 billion yen gain.
Daikin lost 6.1 percent to 3,480 yen after its nine-month net income fell 38 percent from a year earlier to 19.5 billion yen.
Olympus Corp. slid 2.7 percent to 2,020 yen after cutting its outlook for profit on an impairment loss at its imaging division. The company said it expects to lose 16 billion yen this year at its camera business, double the target set in November, and plans to reorganize the division.
THK Co., a maker of industrial linear-motion systems, surged 8.5 percent to 1,683 yen after raising its full-year profit forecast.
Futures on the S&P 500 were little changed today as U.S. President Barack Obama delivered his State of the Union address. The gauge gained 0.2 percent yesterday to the highest level since November 2007 as earnings topped estimates.
The Nikkei Stock Average Volatility Index fell 5.1 percent to 26.75, indicating traders expect a swing of about 7.7 percent on the benchmark gauge over the next 30 days.