Japanese shares fell, with the Topix Index halting a 13-week winning streak, amid disappointing earnings and on concern Group-of-20 leaders will pressure Japan to curb its currency depreciation. The yen strengthened a fourth day and yields on government bonds fell.
Toyota Motor Corp. paced declines among exporters, sliding 1.9 percent. Trend Micro Inc. tumbled 6.1 percent after the anti-virus software maker’s net income fell 23 percent. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, slid 2.9 percent. Tokyo Electric Power Co. led gains among utilities on a report Japan plans 1 trillion yen ($10.7 billion) in loan guarantees for lower-cost energy supplies.
The Topix lost 1.3 percent to 942.41 at the close of trading in Tokyo, closing 1.6 percent lower this week and halting its longest weekly win streak since 1973. The Nikkei 225 Stock Average lost 1.2 percent to 11,173.83.18, gaining 0.2 percent on the week.
“If the G-20 countries start increasing their criticism about how Japan is weakening the yen, then it means they’re rebuking the country’s monetary easing policies,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of about 6 trillion yen ($65 billion). “That’s going to not only be negative for exporters but also reflationary stocks like banks. That’s the biggest negative impact on stocks today.”
The Topix has surged more than 30 percent since elections were announced on Nov. 14 on optimism Prime Minister Shinzo Abe and the central bank will act to stimulate the economy and lead the country out of deflation. The measure 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.
The yen rose to as much as 92.25 to the dollar today after weakening against all 16 of its major peers this year. A stronger Japanese currency cuts the overseas earnings outlook for exporters.
Russian Finance Minister Anton Siluanov said his country wanted more “specific” language opposing exchange-rate interference in a communique to be issued after a G-20 meeting starting today in Moscow. The country’s Deputy Finance Minister Sergei Storchak said they won’t make a separate statement about Japan. The yen’s recent sharp decline has stoked concerns of a currency war.
Yields on 10-year Japanese government bonds fell 1.5 basis points to 0.75 percent as stocks declined.
Exporters slid. Toyota dropped 1.9 percent to 4,725 yen. Honda Motor Co., which gets over 80 percent of its sales outside of Japan, slid 1.6 percent to 3,455 yen. Canon Inc., the world’s biggest camera maker, declined 1.5 percent to 3,265 yen.
Banks were the biggest drag among the Topix’s 33 industry groups. Mitsubishi UFJ slumped 2.9 percent to 508 yen. Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. had their investment ratings lowered at UBS AG, which said their recent gains were an overreaction to Prime Minister Shinzo Abe’s plans for easing. Sumitomo Mitsui dropped 3.2 percent to 3,640 yen, while Mizuho tumbled 5.8 percent to 196 yen.
Trend Micro slumped 6.1 percent to 2,581 yen, its biggest drop since August. The software designer reported net income of 13.4 billion yen for the year ended Dec. 31, a 23 percent decline from a year earlier.
Kirin Holdings Co. slumped 4.9 percent to 1,171 yen after the beverage maker forecast operating profit of 155 billion yen this year, less than a third of its five-year average. The company said net income will probably rise 60 percent to a record this year after booking a gain from selling a stake in Fraser & Neave Ltd.
Power Producers Climb
Utilities were the only group to advance among the Topix’s industry sub-indexes on the Topix. Tokyo Electric Power jumped 4.4 percent to 192 yen, the second-biggest gainer on the Nikkei 225. Kansai Electric Power Co. advanced 3.6 percent and Chubu Electric Power Co. rose 3 percent.
The Japanese government will guarantee 1 trillion yen in loans for lower cost energy supplies, with shale gas projects including those run by Chubu Electric to be the first beneficiary, the Nikkei newspaper reported today.
Futures on the S&P 500 slid 0.2 percent. The gauge yesterday climbed 0.1 percent to a five-year high as a drop in jobless claims and Warren Buffett’s $23 billion purchase of H.J. Heinz Co. outweighed concern over shrinking economies in Europe and Japan.
The Nikkei Stock Average Volatility Index gained 4.9 percent to 26.83, indicating traders expect a swing of about 7.7 percent on the benchmark gauge over the next 30 days. Volume on the measure was about 34 percent higher than its 30-day average at the close of trading.