Japanese stocks fell for a second day, with the Topix Index closing below 1,000 for the first time in a month, after data on U.S. manufacturing missed estimates and the yen rose to a four-week high, damping the earnings prospects for exporters.
Komatsu Ltd., a maker of construction equipment that gets about 80 percent of sales overseas, slipped 3.9 percent. Toyota Motor Corp., the world’s biggest carmaker, dropped 3.1 percent after Japan’s car sales fell by the most in six quarters as government subsidies ended. Nikon Corp. sank 3.2 percent after the Nikkei newspaper reported the camera maker’s full-year operating profit fell 44 percent.
The Topix lost 0.9 percent to close at 991.34, the lowest since March 5. The Nikkei 225 Stock Average fell 1.1 percent to 12,003.43, paring a 2.7 percent decline. Volume was 28 percent above the 30-day average. The benchmark rallied 39 percent since Nov. 14 amid optimism Prime Minister Shinzo Abe government and the Bank of Japan will take more steps to beat deflation.
“Market participants are taking a breather following the recent rally amid extreme expectations the government will boost efforts to stimulate the Japanese economy,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd., which manages about $163 billion. “The yen’s depreciation was too fast so we’re seeing a bit of correction now.”
Shares on the Nikkei 225 traded at 18.3 times estimated earnings on average, compared with 14.1 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600 Index.
Futures on the S&P 500 was little changed today. The index fell 0.5 percent in New York yesterday, retreating from a record high, as the Institute for Supply Management’s factory index fell to 51.3 in March from 54.2 February, the Tempe, Arizona-based group said. The median forecast of economists surveyed by Bloomberg was for 54. A reading of 50 is the dividing line between growth and contraction.
Exporters declined as the yen climbed to 92.57 against the U.S. dollar, the strongest since Feb. 28. BOJ Governor Haruhiko Kuroda reiterated today that the central bank will do whatever it can to beat deflation and that it will conduct bold monetary easing. He spoke in parliament ahead of a two-day policy meeting that starts tomorrow, his first as governor since taking over from Masaaki Shirakawa last month.
Komatsu sank 3.9 percent to 2,123 yen. Fanuc Corp., a maker of industrial robots that makes about 76 percent of sales overseas, slipped 2.3 percent to 14,130 yen. Canon Inc., the world’s biggest camera maker, dropped 3.4 percent to 3,245 yen.
Carmakers fell after the number of vehicles sold in Japan, Asia’s second-largest auto market, fell 9.4 percent to 1.53 million last quarter, according to data from the Japan Automobile Manufacturers Association.
Toyota, whose domestic sales dropped 15 percent during the quarter, decreased 3.1 percent to 4,615 yen. Nissan Motor Co., Japan’s third-biggest carmaker, slipped 3.5 percent to 856 yen. Honda Motor Co. fell 2.6 percent to 3,370 yen.
Nikon sank 3.2 percent to 2,152 yen. Operating profit tumbled 44 percent to about 45 billion yen ($485 million) on weak camera sales in the U.S. and Europe, the Nikkei newspaper reported, without saying where it got the information. That compares with the 48 billion yen average estimate of 19 analysts tracked by Bloomberg. The company is scheduled to report annual results on May 9.
The Nikkei Stock Average Volatility Index rose 2.4 percent to 27.71 today, indicating traders expect a swing of about 7.9 percent on the benchmark gauge over the next 30 days.