Nikkei 225 Falls From Four-Year High on Earnings, Nikon

Japanese shares fell, with the Nikkei 225 Stock Average retreating from its highest close since 2008, amid earnings concern as Nikon Corp. plunged after trimming its outlook on slowing demand from Europe.

Camera-maker Nikon lost 19 percent to lead declines on the Nikkei 225. Yamaha Corp. slumped 16 percent after the piano maker cut its net-income forecast to zero. Nippon Paper Group Inc. surged 13 percent after reversing a loss. Mazda Motor Corp. added 12 percent after the carmaker raised its operating-profit forecast by 80 percent, citing a weaker yen.

The Nikkei 225 dropped 0.9 percent to close at 11,357.07 in Tokyo after yesterday finishing at its highest since Sept. 29, 2008. The broader Topix Index was little changed at 969.18, with volume on the gauge 43 percent above the 30-day average.

“We are in a bull market, but investors are still concerned about earnings,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about 15 trillion yen ($160 billion). “Some investors are selling shares today because yesterday’s rally was excessive.”

The Topix has surged about 34 percent since elections were announced on Nov. 14 on optimism the new government will take aggressive steps to fight deflation. The gauge is trading at 1.1 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.4 for the Stoxx Europe 600 Index.

Earnings Results

Of the 198 companies on the Topix that have reported earnings so far this quarter and for which Bloomberg has estimates, 63 percent have exceeded profit expectations. Some 53 percent missed sales projections, the data show.

Nikon, Japan’s third-biggest camera-maker, plunged the most since 1985 after saying net income will probably be 38 billion yen in the year ending March, compared with a previous forecast of 60 billion yen. The stock slumped 19 percent to 2,139 yen.

Yamaha plummeted 16 percent to 866 yen, its biggest drop since 2008, after cutting its net-income forecast to zero from an earlier projection of a 3.5 billion-yen gain. The maker of musical instruments trimmed its operating-profit outlook 36% to 7 billion yen.

Nippon Paper jumped 13 percent to 1,492 yen after reporting a 7.5 billion net profit, swinging to a gain after a 39.8 billion yen loss in the year-earlier period. The company maintained its fiscal-year outlook.

Mazda added 12 percent to 317 after more than doubling its net-income forecast to 26 billion yen in the 12 months ending March 31. The stock soared 82 percent year-to-date as the weaker yen makes its automobiles more profitable abroad.

Sony Posts Loss

Sony Corp., reporting results after the close of markets in Tokyo, unexpectedly posted an eighth consecutive quarterly loss on waning demand for TVs and consumer preferences for Apple Inc. and Samsung Electronics Co. devices. The shares gained 2.6 percent to 1,519 yen before the announcement.

Japan’s machinery orders unexpectedly rose, gaining 2.8 percent in December from the month before, the Cabinet Office reported today in Tokyo. Fanuc Corp., a maker of factory robotics, added 1.2 percent to 14,790 yen.

Futures on the S&P 500 slid 0.1 percent today. The measure added less than 0.1 percent yesterday as better-than-estimated earnings outweighed concern over Europe’s debt crisis ahead of a meeting of the monetary union’s central bank today.

The Nikkei Stock Average Volatility Index added 6.1 percent to 26.49, indicating traders expect a swing of about 7.6 percent on the benchmark gauge over the next 30 days.

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