Japanese Shares Fall as Insurers Lead Drop, Yen Gains

Japanese shares fell, with the Topix index dropping for a second day, as insurers led declines and exporters slid as the yen strengthened.

NKSJ Holdings Inc. sank 2.2 percent to lead insurance shares lower. Canon Inc., the world’s biggest camera maker, lost 0.6 percent. Daiichi Sankyo Co. slumped 3.9 percent, the biggest drop on the Nikkei 225 Stock Average, as Cantor Fitzgerald LP said edoxaban, its new blood-thinning drug, may have trouble competing with existing anti-coagulants. Sharp Corp. surged 7.6 percent after a report it was considering a tie-up with Hewlett-Packard Co. in photocopiers.

The Topix fell 0.3 percent to 1,233.43 at the close of trading in Tokyo, after rising as much as 0.4 percent. About equal numbers of shares rose and fell, with volume 12 percent below the 30-day average. The Nikkei 225 slipped 0.3 percent to 15,076.08. The yen gained 0.1 percent against the dollar after Federal Reserve Chairman Ben S. Bernanke said low U.S. interest rates will continue long after the asset purchase program ends.

“While the U.S. continuing with quantitative easing is positive, a lot of the expectations have already been priced into stocks, so investors feel cautious when shares rise too high,” said Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co., which oversees about 600 billion yen. “However, a lot of investors who have missed out on the recent rally will be looking to buy on dips. The market is likely to be directionless for a little while.”

U.S. Futures

Futures on the Standard and Poor’s 500 Index slipped less than 0.1 percent. Bernanke said the labor market has shown “meaningful improvement” since the start of the central bank’s bond-buying program and that the target for the federal funds rate is likely to remain near zero “for a considerable time after the asset purchases end, and perhaps well after.”

The U.S. gauge yesterday fell 0.2 percent after disappointing forecasts from Best Buy Co. and Campbell Soup Co.

Insurance companies dropped the most among the 33 Topix groups today, followed by banks and utilities. NKSJ Holdings declined 2.2 percent to 2,698 yen, while Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 0.8 percent to 653 yen. Chubu Electric Power Co. sank 1.9 percent to 1,392 yen.

The yen gained 0.1 percent to trade at 100.06 per dollar after falling by the same amount earlier. Canon slid 0.6 percent to 3,215 yen. Nissan Motor Co., Japan’s third-largest carmaker by market value, fell 0.3 percent to 923 yen.

Sony Corp. dropped 1 percent to 1,868 yen after saying some of the PlayStation 4 consoles that went on sale in North America last week were reportedly damaged during shipping, following customer complaints the devices suddenly turned themselves off.

OECD Forecasts

The Organization for Economic Cooperation and Development cut its global growth forecasts for this year and next as emerging-market economies including India and Brazil cool. Japan’s gross domestic product will increase 1.8 percent this year and 1.5 percent in 2014, the OECD said. A “credible fiscal consolidation plan” to achieve a surplus in 2020 is a top priority for the country, it said.

Data today showed Japan’s trade deficit for October was 1.09 trillion yen ($10.9 billion), its widest on record, as a revival in exports to the U.S. and China was overwhelmed by the nation’s soaring costs for imported fuel in the wake of the nuclear industry’s shutdown.

Daiichi Sankyo dropped 3.9 percent to 1,868 yen. The drugmaker’s edoxaban, the latest in a new group of blood thinners aimed at replacing warfarin, was found in a study to be as effective as the drug that has been the standard of care for 60 years. Still, the data shows that it may not be enough to “meaningfully” compete with three anti-coagulants already on the market, Cantor Fitzgerald analyst Emilia Falcetti wrote in a report.

Sharp Climbs

Sharp jumped 7.6 percent to 299 yen, the most on the Nikkei 225. The electronics maker may produce copiers for Hewlett-Packard under a original-equipment manufacturer tie-up, the Nikkei newspaper reported, without attribution.

A panel advising the government on how to overhaul Japan’s Government Pension Investment Fund is set to hold a media briefing today. The panel may say that the 121 trillion yen ($1.21 trillion) pension fund should consider increasing investments in assets other than Japanese government bonds, which currently make up the majority of its allocations.

Shares on the Topix traded at 1.25 times book value today, compared with 2.58 for the S&P 500 and 1.79 for the Stoxx Europe 600 Index yesterday. The Japanese measure’s 30-day volatility was 15.80 today, down from its five-year median of 19.02.