Japan Stocks Fall as BOJ Refrains From Boosting Record Stimulus

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Japanese stocks fell as the Bank of Japan refrained from boosting record stimulus and after the Federal Reserve kept interest rates on hold as data showed the world’s biggest economy barely grew last quarter.

Honda Motor Co. tumbled 6.7 percent and Shin-Etsu Chemical Co. slid 7 percent after reporting profit that missed estimates. Takeda Pharmaceutical Co. slumped 2.1 percent after saying it will pay $2.37 billion to resolve U.S. lawsuits accusing the company of hiding cancer risks from its Actos diabetes medicine. TDK Corp. gained 4 percent, the most on the Nikkei 225 Stock Average, after its dividend target beat estimates.

The Topix index lost 2.1 percent to 1,592.79 at the close in Tokyo, its biggest loss since Jan. 6, as it reopened after a holiday. All but two of its 33 industry groups fell. Volume on the measure was about 25 percent above its 30-day average. The Nikkei 225 dropped 2.7 percent to 19,520.01.

“Investors who were optimistic for additional easing are winding down their positions,” said Tsutomu Yamada, a market analyst at Kabu.com Securities Co. in Tokyo. “Prices look like they’re about to turn negative, so there’s just cause for additional easing. The BOJ is insisting the foundation for prices is still strong. There’s a discord with reality.”

Japan’s monetary authority refrained from boosting stimulus even after inflation came to a halt, with Governor Haruhiko Kuroda betting price gains will re-emerge as the impact from cheaper oil fades.

Policy on Hold

The BOJ kept a plan to expand the monetary base at an 80 trillion yen ($672 billion) annual pace, as forecast by 32 of 34 economists surveyed by Bloomberg News. The central bank also cut its forecast for fiscal 2015 core consumer price gains to 0.8 percent from a January estimate of 1 percent and said it expects to reach 2 percent inflation around the first half of fiscal 2016.

Japanese industrial production fell 0.3 percent in March from February, beating analyst estimates for a 2.3 percent contraction, data showed Thursday in Tokyo.

The Standard & Poor’s 500 Index lost 0.4 percent in New York on Wednesday after Fed officials kept key rates near zero, saying first-quarter weakness that saw the economy almost grind to a halt was partly due to “transitory factors,” and they expect growth to pick up.

U.S. Economy

Policy makers said they’ll boost U.S. rates when they see further labor-market improvement and are “reasonably confident” inflation will move back to their 2 percent goal over time. They have said their decision will be guided by the latest data. U.S. gross domestic product expanded 0.2 percent last quarter on an annualized bases, compared with the 1 percent growth predicted by economists.

E-mini futures on the S&P 500 lost 0.1 percent.

“Markets today are all consistent with the high volatility theme in anticipation of Fed rate hikes, and still consistent with periodic healthy corrections in markets,” said Nader Naeimi, who helps manage about $118 billion as Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd. “There’s end-of-month profit taking across the board. You can see the strongest markets are getting hit the most.”

About 330 Topix-listed companies report results this week, according to data compiled by Bloomberg. Those releasing results Thursday include Sony Corp., Murata Manufacturing Co., Nitto Denko Corp., Fujitsu Ltd., Japan Tobacco Inc., Nomura Holdings Inc., airlines, shipping companies and brewers.

Honda Slumps

Honda slumped 6.7 percent, the most since March 2009. The carmaker forecast 525 billion yen in profit for the year ending March 2016, missing estimates for 661 billion yen.

Shin-Etsu Chemical lost 7 percent, the biggest drop since June 2013. Full-year net income will probably be 128.6 billion yen, the company said, missing analyst estimates for 130 billion yen.

Takeda Pharmaceutical slid 2.1 percent. Asia’s largest drugmaker said it will pay $2.37 billion to resolve U.S. lawsuits accusing the company of hiding its Actos diabetes medicine’s cancer risks, taking the charge against earnings in the fourth quarter of fiscal 2014.

TDK gained 4 percent as the electronic component maker said it’s targeting 120 yen in dividends this fiscal year, beating analyst estimates for 100 yen.

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