April 1 (Bloomberg) -- Japanese stocks fell, with the Topix Index dropping the most since March 2011, as a central bank survey of manufacturer sentiment missed economists’ estimates and the yen climbed.
Mazda Motor Corp., the Japanese automaker with the highest proportion of exports, lost 4.3 percent. Panasonic Corp., the unprofitable electronics maker, dropped 3.4 percent after the Wall Street Journal reported a unit that makes entertainment and communications systems for airlines is under a bribery investigation by U.S. regulators. Nomura Holdings Inc. lost 4.3 percent after Japan’s biggest brokerage was sued by a trust over an alleged breach of contract involving $1.14 billion of mortgage-backed securities.
The Topix dropped 3.3 percent to close at 1,000.57 in Tokyo, the biggest drop since March 15, 2011. The Nikkei 225 Stock Average slid 2.1 percent to 12,135.02. Volume on the gauge was 9.8 percent below the 30-day intraday average with markets in Hong Kong, Australia and New Zealand closed for a holiday. The Bank of Japan holds a policy meeting April 3-4.
“The market is taking a hit as the Tankan missed forecast a bit and buy orders by foreign investors are low due to Easter,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of about 6 trillion yen ($64 billion). “Stocks may be sold after the market digests all the major factors at the BOJ meeting.”
The cost of bearish options on the Nikkei 225 traded near an eight-month high as investors bought protection against declines amid concern the BOJ will fail to deliver stimulus at this week’s meeting, the bank’s first with Governor Haruhiko Kuroda at its head.
Japan’s benchmark share gauge has rallied 40 percent from Nov. 14 amid optimism Prime Minister Shinzo Abe government and the BOJ will take more steps to beat deflation. The measure traded at 1.5 times book value, compared with 2.2 for Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Confidence among big Japanese manufacturers improved less than economists expected. The quarterly Tankan survey of sentiment for large makers of cars and electronics rose to minus 8 in March from minus 12 in December, the BOJ said in Tokyo today. The median estimate of economists surveyed by Bloomberg was minus 7. A negative number means pessimists outnumber optimists.
Exporters dropped as the yen rose against all 16 of its major peers, damping the prospects for overseas earnings. Mazda fell 4.3 percent to 269 yen. Sony Corp., the country’s biggest electronics exporter, dropped 4 percent to 1,572 yen.
Shares also dropped after a Chinese manufacturing gauge rose to an 11-month high, even as it missed estimates. The Purchasing Managers’ Index climbed to 50.9 in March from 50.1 in February, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. Readings above 50 indicate expansion.
Futures on the S&P 500 slid 0.2 percent as the U.S. market reopens today following the Good Friday holiday. The gauge rose to a record on March 28 as data on the housing market bolstered confidence in the world’s largest economy while concern over Europe’s debt crisis faded.
Panasonic fell 3.4 percent to 632 yen after the legal department of Panasonic Avionics, based in Lake Forest, California, told executives and employees to preserve documents that may be relevant to the bribery investigation, the Wall Street Journal said, citing company documents. Chieko Gyobu, a spokeswoman for the Osaka, Japan-based parent company, declined to comment when reached by phone.
Nomura lost 4.3 percent to 552 yen. HSBC Bank USA, National Association filed a suit in state Supreme Court in Manhattan, accusing Nomura Credit & Capital Inc. of failing to comply with obligations associated with 5,292 residential mortgages it purchased and sold to the trust.
Among stocks that gained, Tokyo Electric Power Co., the utility at the center of the 2011 nuclear crisis, rose 4.3 percent to 266 yen, the most on the Nikkei 225. The utility said it plans to cut cost by an extra 100 billion yen per year and President Naomi Hirose vowed to do whatever it takes to return to profit.
The Nikkei Stock Average Volatility Index rose 5.5 percent to 27.09 today, indicating traders expect a swing of about 7.8 percent on the benchmark gauge over the next 30 days.
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