Japanese Stocks Halt Four-Day Rally With Greek Talks Deadlocked

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Japanese stocks fell, with the Nikkei 225 Stock Average retreating from four days of gains that pushed it to an 18-year high, as talks between Greece and its creditors remained deadlocked.

Toyota Motor Corp., the world’s biggest carmaker by market value, lost 1.3 percent. Fanuc Corp. sank 2.7 percent after Goldman Sachs Group Inc. cut its target price on the robotics maker, while Jtekt Corp. jumped 4 percent after the brokerage upgraded its investment rating. iFlag Co. surged 45 percent after Hikari Tsushin Inc. said it would make the IT company a wholly owned unit.

The Topix index lost 0.5 percent to 1,670.91 at the close of trading in Tokyo, with about three shares falling for each that gained. Volume on the measure was about 14 percent below its 30-day average. The Nikkei 225 slipped 0.5 percent to 20,771.40, after closing Wednesday at its highest level since December 1996.

“We’re in a market where we’re swinging from joy to sorrow over Greece,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. “The Nikkei 225 had risen close to 21,000, so I expect some adjustments.”

European officials resumed talks on Greece’s bailout on Thursday after a day of negotiations broke up in the early hours without ending the standoff that has brought the country on the cusp of a default.

Downbeat Tone

The race for a deal is accelerating as Greece moves nearer to the June 30 expiry of its euro-area bailout without any agreement in place ensuring it can meet a payment of 1.5 billion euros ($1.7 billion) to the International Monetary Fund that falls due the same day.

“The market’s not pricing in a Grexit just yet,” said Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “But the probability is changing significantly hour by hour as we run into the deadline. That’ll continue to plague people’s thoughts until there’s more clarity.”

E-mini futures on the Standard & Poor’s 500 Index added 0.2 percent. The underlying gauge fell 0.7 percent in New York on Wednesday amid the Greek talks, and as revised data showed a bigger gain in consumer spending helped the world’s largest economy contract less than previously estimated. Gross domestic product fell at a 0.2 percent annualized rate in the first quarter, compared with a previously reported 0.7 percent drop.

Carmakers and consumer electronics makers were the biggest drags to the Topix. Toyota sank 1.3 percent, while Nissan Motor Co. lost 1.6 percent.

Fanuc slid 2.7 percent after Goldman Sachs reduced the target price on the stock by 5.9 percent and removed it from the brokerage’s conviction list.

Jtekt jumped 4 percent, the biggest gain on the Nikkei 225 and its highest close since 2007. The bearings maker was raised to buy from neutral by Goldman Sachs.

iFlag surged 45 percent, the most on record. Hikari Tsushin will make the company a wholly owned unit via a stock swap, and will pay 0.012 a share for each iFlag share.