Japan Shares Fall on Tiremakers, Brokers; Sharp Tumbles

Japanese shares fell, with the Topix index retreating for a second day, as rubber-products makers and brokerages led declines and investors awaited next week’s Federal Reserve meeting.

Bridgestone Corp., Asia’s largest tiremaker, slipped 1.4 percent as the yen advanced and Deutsche Bank AG downgraded the stock. Daiwa Securities Group Inc. slid 1.6 percent, pacing losses among brokerages. Sharp Corp. sank 6 percent after reports the TV maker will announce a share sale. Mitsubishi Motors Corp. tumbled 8.1 percent as the carmaker was said to be considering a public offering of stocks.

The Topix lost 0.4 percent to 1,184.36 at the close in Tokyo, with volume 18 percent higher than the 30-day average. The Nikkei 225 Stock Average fell 0.3 percent to 14,387.27. The Fed meets Sept. 17-18, with economists estimating the U.S. central bank will taper its monthly bond buying by $10 billion to $75 billion, according to the median of 34 responses in a Bloomberg News survey.

“We’re in wait-and-see mode ahead of next week’s Fed meeting,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. “While the situation in Syria has calmed and China looks like it’s seen the worst of its slowdown, buying after the Olympics news seems to have run its course and the yen has stopped weakening, making exporters less attractive.”

The Topix advanced 7.1 percent this month amid optimism about Tokyo hosting the 2020 Summer Games. The gauge soared 38 percent this year, as Japanese equities performed the best among developed markets tracked by Bloomberg.

Machinery Orders

Core machinery orders, an indicator of future capital spending that excludes volatile orders for ships and those from utilities, were unchanged in July from the previous month, the Cabinet Office said today in Tokyo. Economists expected a 2.4 percent increase. Orders rose 6.5 percent on the year, compared with estimates for a 7.7 percent advance.

Japan’s currency, which yesterday touched 100.61 per dollar, its weakest level since July 22, advanced 0.6 percent to 99.27 today.

“After the market’s recent gains the timing is right for some selling and the yen has started strengthening as well, so we’re seeing some profit-taking,” said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities, Japan’s second-largest brokerage. “The impact from machinery orders is limited as they’re very volatile. And while they missed estimates, they’re still recovering.”

Prime Minister Shinzo Abe will announce that Japan will raise the sales tax to 8 percent in April as planned, the Yomiuri newspaper reported today without saying where it got the information. The prime minister will detail a 5 trillion yen stimulus package along with the levy increase, according to the report. Chief Cabinet Secretary Yoshihide Suga said today Abe has yet to make a decision on the tax.

Apple Suppliers

Japanese suppliers of Apple Inc. retreated for a second day after the maker of the iPhone unveiled a cheaper model that disappointed critics. Murata Manufacturing Co., which sells electronic components and counts Apple as its biggest customer, fell 3.1 percent to 6,820 yen. Daikin Industries Ltd. sank 1.5 percent to 5,190 yen.

Exporters declined as the yen strengthened. Carmakers and electrical-appliance producers were the biggest drags on the Topix. Toyota Motor Corp., which gets more than 70 percent of sales overseas, slipped 1.1 percent to 6,270 yen. Sony Corp., the nation’s No. 1 consumer-electronics exporter, lost 1.2 percent to 2,103 yen.

Bridgestone dropped 1.4 percent to 3,430 yen. Deutsche Bank equity analyst Kurt Sanger downgraded the stock to hold from buy with a 12-month price target of 3,800 yen per share.

Mitsubishi Motors

Mitsubishi Motors fell the most on the Nikkei 225, plunging 8.1 percent to 1,028 yen. The carmaker is nearing a decision to raise as much as 200 billion yen ($2 billion) via a public offering of new shares to buy back preferred stock held by other Mitsubishi companies, two people with direct knowledge of the plan said. The company was bailed out by Mitsubishi UFJ Financial Group Inc., Mitsubishi Heavy Industries Ltd. and Mitsubishi Corp. in 2004 and 2005.

Sharp was the second-biggest loser on the Nikkei 225, sliding 6 percent to 363 yen. The company may announce a public share sale and third-party allotment as early as next week, according to Japanese media reports. The TV maker is trying to rebuild its balance sheet after greater competition in liquid-crystal displays and flat-panel televisions drove it to losses in the past two fiscal years.

Among stocks that rose, Nisshin Steel Holdings Co. climbed 2.5 percent to 1,277 yen, after briefly advancing to its highest level since listing in 2012. Sony Financial Holdings Inc., which is 60 percent owned by Sony Corp., increased 3.7 percent to 1,787 yen for the second-biggest gain on the Nikkei 225.

Foreign Investors

Overseas investors were net buyers of Japanese stocks in the five days ended Sept. 6, after being net sellers the previous two weeks. Foreigners bought a net 185.4 billion yen in equities, the most in seven weeks, according to Ministry of Finance data released today.

Futures on the S&P 500 fell less than 0.1 percent today. The gauge gained 0.3 percent to a one-month high in New York yesterday as diminishing concern over a military strike against Syria offset Apple’s biggest decline since April.

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