Japan’s Topix Posts Biggest Loss in 11 Weeks After U.S. Selloff

Japanese stocks fell, with the Topix index posting its biggest loss in 11 weeks. Exporters dropped as the yen gained for a second day after a selloff in U.S. shares.

Toyo Tire & Rubber Co. sank 7 percent after saying more of its rubber bearings used in buildings may not meet earthquake standards. Semiconductor maker Tokyo Electron Ltd. fell the most in five months. Exporters slid as the yen strengthened for a second day, with TDK Corp. leading losses. Energy shares rose as U.S. oil jumped after Saudi Arabia and its allies started bombing rebel targets in neighboring Yemen.

The Topix dropped 1.5 percent to 1,568.82 at the close in Tokyo, the biggest loss since Jan. 6. All but two of its 33 industry groups fell. The Nikkei 225 Stock Average retreated 1.4 percent to 19,471.12. The yen gained 0.5 percent to 118.91 per dollar after data showing an unexpected drop in orders for American durable goods prompted some economists to lower forecasts for first-quarter U.S. growth. The Standard & Poor’s 500 Index sank the most in two weeks.

“We’re seeing profit-taking and a technical correction today,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd. “The decline can be attributed to the high levels Japanese stocks have been trading at, but also to” tumbling U.S. stocks and revisions to U.S. economic forecasts.

Orders for U.S.-made goods meant to last at least three years declined 1.4 percent in February. Economists had forecast a 0.2 percent increase.

Growth Forecasts

Economists at JPMorgan Chase & Co. cut their forecast for first-quarter gross domestic product after the manufacturing report to a 1.5 percent annualized pace from 2 percent. The Federal Reserve Bank of Atlanta also lowered its projection for annual growth in the quarter to 0.2 percent from 0.3 percent, according to its website.

“The U.S. economy is supposed to be doing pretty well, but it’s actually quite unclear,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo.

Toyo Tire dropped 7 percent to 2,178 yen after reporting to the Japanese government that more of its rubber bearing products may not meet safety standards. The products, which are used to increase building resistance to earthquakes, would have to be replaced at 55 facilities, the company said.

Semiconductor manufacturers declined after the Philadelphia Semiconductor Index fell the most since Oct. 10. Tokyo Electron dropped 5.8 percent to 8,296 yen, while Sumco Corp. slid 5.2 percent to 2,100 yen.

Rating Cut

Exporters fell as the yen strengthened for a second day. TDK, an electronic parts maker that gets 90 percent of revenue overseas, slid 4.5 percent to 8,760 yen. Nissan Motor Co. dropped by the most in nearly three months, declining 2.1 percent to 1,254.5 yen.

Energy shares jumped after Saudi Arabia began bombing targets in Yemen, sending West Texas Intermediate crude above $50 per barrel for the first time in two weeks and taking its five-day gain to the most since 2009. King Salman ordered airstrikes against Shiite Houthi positions after an appeal from Yemen’s President Abdurabuh Mansur Hadi.

The Topix Mining index rose 2 percent, with oil explorer Inpex Corp. adding 2 percent to 1,374.5 yen, while Japan Petroleum Exploration Co. climbed 3.5 percent to 4,090 yen.

Tetsujin Inc. rose 2 percent to 500 yen after reporting preliminary earnings that were higher than estimated. The karaoke operator raised its forecast for net income in the half-year through Feb. 28 by 55 percent to 170 million yen.

“Some investors might be looking to pick up dividend rights if shares start looking cheap,” said Otsuka.

Investors wanting to receive dividends had until the end of Thursday to add stocks that pay out at the end of the Japanese financial year. Shares bought Thursday settle on Mar. 31, the last day of the fiscal year.

E-mini futures on the S&P 500 were little changed after the underlying measure lost 1.5 percent Wednesday in New York as a selloff in semi-conductors spread to the broader market. The Nasdaq Composite Index dropped 2.4 percent, the most in 11 months.

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