Japan’s Topix Falls Sixth Day as Yen Holds Gains on U.S.

Japanese shares fell, with the Topix index capping its longest losing streak since July 2012, as the yen held near its strongest level in a month against the dollar amid growing concern the U.S. political impasse will continue.

Sony Corp., an electronics maker that gets almost 70 percent of sales overseas, slid 1.8 percent. Digital Garage Inc. plunged 10 percent after Twitter Inc. didn’t list the Tokyo-based Internet company as a stockholder in its filing for an initial public offering. JGC Corp. jumped the most on the Nikkei 225 Stock Average after its joint venture won an engineering contract from Chevron Phillips Chemical Co.

The Topix lost 0.9 percent to 1,163.82 at the close in Tokyo, extending its weekly decline to 4.4 percent. The Nikkei 225 slipped 0.9 percent today to 14,024.31. Investors are concerned the deadlock over the U.S. government shutdown will impede negotiations over raising the debt limit. Data yesterday showed U.S. service-industry growth missed estimates. The Bank of Japan kept monetary policy unchanged today.

“While we don’t think the U.S. will default, the uncertainty is enough to put the market under pressure,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages about $130 billion. “There’s always a chance that it won’t get resolved before the deadline. When we get bad news out of the U.S., the yen strengthens and hurts the Japanese market.”

Futures on the Standard and Poor’s 500 Index were little changed today. The gauge declined 0.9 percent yesterday, the most in a month, as the Treasury Department said the government will reach its borrowing limit Oct. 17, leaving only cash to pay the bills.

Debt Limit

The failure of U.S. lawmakers to avert a government shutdown fueled concern they won’t be able to agree on raising the nation’s $16.7 trillion debt limit later this month. Treasury warned a federal default could lead to a recession at least as bad as the 2008 financial crisis.

Data showed U.S. service industries expanded in September at a slower pace than forecast, while a separate report from the Labor Department indicated fewer Americans than expected filed for unemployment benefits last week, signaling U.S. employers were maintaining staff counts leading up to the shutdown.

“Until the debt-ceiling issue has been sorted, investor concern isn’t going to disappear,” said Tamiji Shinada, Tokyo-based executive director of investment research at Nomura Securities Co., Japan’s biggest brokerage. “Weakening U.S. economic data is also negative as investors are very sensitive to this right now. That said, shares have been falling for a while recently and investors may buy to adjust their holdings at the end of the week.”

Exporters Drop

The yen traded at 97.09 against the dollar today after gaining for the past three days. Sony slid 1.8 percent to 2,017 yen. Toyota Motor Corp., Asia’s biggest carmaker, slipped 1.1 percent to 6,180 yen. A gauge tracking tiremakers sank 2.8 percent to lead declines among the Topix’s 33 industry groups.

Among other stocks that fell, GS Yuasa Corp. slumped 2.6 percent to 608 yen. Mitsubishi UFJ Morgan Stanley Securities Co. downgraded the battery manufacturer’s stock to neutral from outperform with a 12-month price target of 530 yen.

Digital Garage sank 10 percent to 2,817 yen. Investors were expecting that Twitter would disclose the company as a shareholder, David Gibson, a Tokyo-based analyst at Macquarie Securities Ltd., said in a telephone interview. The Japanese company wasn’t listed among individuals and institutions holding stakes of more than 5 percent in Twitter’s S-1 filing with the U.S. Securities and Exchange Commission yesterday.

BOJ Holds

The BOJ refrained from adding to unprecedented monetary stimulus today after concluding a two-day policy meeting. Governor Haruhiko Kuroda’s board retained a goal of expanding the monetary base by 60 trillion yen to 70 trillion yen ($617 billion to $720 billion) a year, the central bank said in Tokyo.

All but one of 36 economists surveyed by Bloomberg News forecast no change in policy, with most expecting the central bank to add to unprecedented stimulus in the first half of 2014, the poll showed.

Among stocks that advanced, JGC climbed 3.2 percent to 3,530 yen to post the biggest gain on the Nikkei 225. A venture between the industrial-plant builder and U.S.-based Fluor Corp. was awarded an engineering, procurement and construction contract by Chevron Phillips Chemical for the U.S. Gulf Coast Petrochemicals Project, according to a statement by Fluor.

Trend Micro Inc. jumped 3.1 percent to 3,630 yen, the second-biggest advance on the Nikkei 225. The maker of anti-virus software was raised to buy from neutral at Daiwa Securities Group Inc., which expects double-digit growth in sales and operating profit in the first three quarters of the fiscal year ending March 2014.

Value HR

Value HR Co., a Tokyo-based health-care services company, surged 67 percent to 3,345 yen on its Jasdaq market debut, compared to its IPO price of 2,000 yen.

The Topix traded at 1.22 times book value today, compared with multiples of 2.47 for the S&P 500 and 1.74 for the Stoxx Europe 600 Index yesterday. The Japanese measure’s 30-day historic volatility was at 18.53 today, compared with its five-year median of 19.34.

Before it's here, it's on the Bloomberg Terminal.