Japanese shares fell amid low volume, with the Topix index retreating for a fifth time in six days, as the yen gained against the dollar and investors shunned risk assets amid U.S. tension with Syria.
Tokyo Electric Power Co., whose shares tumbled 27 percent in six days through yesterday, climbed the most on the Nikkei 225 Stock Average after the government said it would take over the handling of radioactive water spills at the utility’s Fukushima Dai-Ichi nuclear plant. A Topix gauge tracking tiremakers fell 1.5 percent, with Sumitomo Rubber Industries Ltd. leading losses. Machinery-maker Komatsu Ltd. dropped 1.6 percent after its investment rating was cut by SMBC Nikko Securities Inc. and Tokai Tokyo Securities Co.
The Topix slipped 0.5 percent to 1,134.02 at the close of trading in Tokyo, after rising as much as 0.3 percent. All but four of the gauge’s 33 subsectors declined, with volume about 26 percent below the 30-day average. The Nikkei 225 fell 0.7 percent to 13,542.37. The yen gained 0.4 percent to the dollar.
“You’re seeing a little bit of overreaction in the markets amid very light trading,” said Koichi Kurose, chief economist in Tokyo at Japanese lender Resona Bank Ltd. “Shares right now are easily flung around by news flow.”
Futures on the Standard & Poor’s 500 Index slid 0.1 percent. The gauge fell 0.4 percent yesterday after U.S. Secretary of State John Kerry said President Barack Obama will hold Syria accountable for the “moral obscenity” of deploying chemical weapons against its people. White House press secretary Jay Carney told reporters that Obama “has not made” a decision on what action to take.
The U.S. equity measure had earlier climbed as investors speculated whether a report showing durable-goods orders declined in July would delay stimulus cuts.
Stocks, bonds and commodities have whipsawed since May, when Federal Reserve Chairman Ben S. Bernanke first signaled the prospect of reducing stimulus if the U.S. economy and job market continue to improve. The Fed will probably pare bond purchases at its Sept. 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg Aug. 9-13.
Tokyo Electric Power jumped 12 percent to 531 yen, the most since July 16. The utility known as Tepco was the most-actively traded stock on the Topix today. Japan’s government will lead “emergency measures” to tackle radioactive water spills at the wrecked Fukushima nuclear plant, wresting control of disaster management from the power producer, Trade Minister Toshimitsu Motegi told reporters last night.
Tepco last week said a storage tank leaked 300 metric tons of radioactive water, which the nuclear regulator called a “serious incident” in its worst assessment of the problems at the plant since the March 2011 disaster.
Energy explorers and tiremakers slumped today, leading declines among the Topix’s groups. Inpex Corp., the country’s biggest oil explorer and producer by market value, slid 1.6 percent to 428,000 yen.
Bridgestone Corp., Japan’s No. 1 tiremaker, lost 1.1 percent to 3,285 yen. Sumitomo Rubber Industries Ltd. dropped 3.7 percent to 1,387 yen after its share-price target was cut to 1,800 yen from 2,000 yen by Credit Suisse Group AG.
Among other stocks that fell, Komatsu, the world’s third-largest maker of construction and mining machinery by market value, declined 1.6 percent to 2,209 yen. Its investment rating was cut to neutral from outperform by SMBC Nikko. Signs of improvement in Komatsu’s mine-machinery business look “poor” and demand from North America is waning, Taku Ouchi, an analyst at the brokerage wrote in a report dated today. A Tokai Tokyo Securities analyst also reduced its rating to neutral from above average.
Japanese shares have led gains among developed markets in 2013 amid optimism monetary easing by the Bank of Japan and economic reforms will boost growth. Their performance has lagged in the past three months, with the Topix dropping about 11 percent from its May 22 close, which was the highest since 2008.
“Risk appetite is low,” said Benjamin Collett, head of Asian equities at Sunrise Brokers LLP. “But we think this is going to be short-lived. Prime Minister Shinzo Abe is pushing capital expenditure via tax breaks, so we are advising our clients to buy” cyclical stocks that may benefit.
The Topix traded at 1.18 times book value today, compared with 2.43 for the S&P 500 and 1.71 for the Stoxx Europe 600 Index yesterday. The Japanese gauge’s 30-day historic volatility was at 26.42 today, compared with its five-year median of 19.42.