Japanese Stocks Fall as Airlines Decline on Broker's Outlook

  • Airlines tumble after Mitsubishi UFJ lowers price target
  • China considers metal industry call for curb on short selling

Japanese stocks fell, with airlines leading declines after a brokerage downgraded its price target on the nation’s two largest carriers. Commodity producers rallied on signs China is stepping up its efforts to support the domestic metals industry.

The Topix index dropped 0.5 percent to close at 1,594.45 in Tokyo, capping a 0.5 percent loss for the week that was shortened by a holiday. The Nikkei 225 Stock Average slid 0.3 percent to 19,883.94, falling from a three-month high.

“Japanese stocks had risen mostly because short-term traders bid them up, but with the Nikkei 225 reaching the 20,000 mark, there was no reason to keep buying,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “Besides that, there aren’t many catalysts or themes out there right now.”

ANA Holdings Inc. fell 1.8 percent and Japan Airlines Co. retreated 2.3 percent after Mitsubishi UFJ Morgan Stanley Securities Co. said both carriers face a drop in fuel surcharges from Dec. 1 and stiffer competition from Chinese rivals. The broker lowered its price target for both companies, and maintained their neutral rating.

Chinese regulators are considering a request from a metal industry group to curb excessive short selling, according to people with knowledge of the matter. Sumitomo Metal Mining Co. climbed 2.1 percent after copper yesterday jumped as much as 4.2 percent, while Nisshin Steel Co. rose 1.3 percent.

Employment, Inflation

Government data showed Japan’s jobless rate dropped to 3.1 percent in October, the lowest since July 1995 and beating economist estimates for 3.4 percent. Separately, consumer prices excluding fresh food declined 0.1 percent from a year earlier, matching estimates.

“We’ve been close to full employment for a while, but now it seems we may finally be at a level where the lack of people could actually drive wages higher,” said Mari Iwashita, chief market economist at SMBC Friend Securities Co. in Tokyo. “Inflation was mostly in line with expectations. But the October figures make me optimistic this was the bottom for the bout of inflation weakness we’ve seen since the summer.”

Makita Corp. fell 1.5 percent after Barclays Plc cut its rating on the maker of electric power tools. The broker said that while demand from emerging markets remains firm, earnings were revised lower due to unfavorable currency trends.

Aska Pharmaceutical

Aska Pharmaceutical Co. jumped 8 percent, bringing its two-day surge to 19 percent, after the Japanese government announced Thursday it would expand financial aid for fertilization treatment as part of its measures to boost the birth rate. Aska has an infertility treatment in trial, according to its annual report.

E-mini futures on the Standard & Poor’s 500 Index added 0.2 percent from their close on Wednesday. U.S. markets were closed on Thursday for Thanksgiving.

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