Japan Stocks Sink Third Day After Yen Rises Most in Three Months

  • Crude oil resumes decline amid concerns over supply glut
  • Japan's producer prices index falls less than expected

Japanese stocks fell for a third day after the yen jumped against the dollar by the most in three months, damping the outlook for exporters.

The Topix index retreated 1 percent to 1,540.35 in Tokyo, closing at its lowest in more than a month. The Nikkei 225 Stock Average lost 1.3 percent to 19,046.55. The yen traded at 121.68 per dollar after jumping 1.2 percent on Wednesday, the most since Sept. 1. Crude oil in the U.S. fell to the lowest level in more than six years amid ongoing concerns of a global supply glut.

“Oil is still excessively low at this price and concerns that this will be the status quo is making investors avoid risk for now,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo said by phone. “With the yen strengthening, exporters and manufacturers are likely to be at the center of risk-off moves.”

The greenback’s weakness weighed on exporters, sending Mazda Motor Corp. 2.7 percent lower. Subaru automaker Fuji Heavy Industries Ltd., which relies on North America for 60 percent of sales, lost 1.7 percent.

The Nikkei 225 has slumped 4.8 percent since closing at a three-month high of 20,012.40 on Dec. 1. The gauge is approaching its 50-day moving average, a technical signal watched by traders.

Nikkei 225 is approaching 50-day moving average.

E-mini futures on the Standard & Poor’s 500 Index rose 0.3 percent after the underlying measure lost 0.8 percent on Wednesday to close at its lowest level in a month. 

Oil Falls

Technology companies, the U.S. market’s best-performing sector over the past two months, bore the brunt of Wednesday’s decline. Equities erased an early advance as a rally in crude oil withered to close in the U.S. at $37.16 a barrel.

The Chicago Board Options Exchange Volatility -- a measure of U.S. stock market turbulence -- spiked 32 percent this week, the biggest three-day jump since the bottom of the summer selloff on Aug. 25.

“Everything’s a little bit exaggerated because it’s the end of the year. There’s not a lot of fight left in people and this is just another excuse to close out the books and say we’re done,” said Simon Grose-Hodge, a Singapore-based investment strategist at LGT Group. Commodity prices are “probably getting relatively close to being bombed out, but we just don’t see any catalyst for a sustainable reversal.”

A slump this week in commodity prices has clouded prospects for recoveries in the U.S. and Europe as capital spending from oil producers and miners wanes at the same time as China’s economy shows few signs of firming. The materials slide has also kept inflation below central-bank targets one week before the Federal Reserve is expected to boost U.S. borrowing costs for the first time in a decade.

Bridgestone Bid

Bridgestone Corp. lost 1.8 percent after the Nikkei newspaper reported the tiremaker is planning to outbid Carl Icahn for Philadelphia-based auto service chain Pep Boys -- Manny Moe & Jack. Bridgestone had agreed to buy Pep Boys for about $835 million in October, but was later bested by a competing offer from Icahn.

Isetan Mitsukoshi Holdings Ltd. sank 3.7 percent after Nomura Holdings Inc. cut its rating on the department-store operator. Other retailers also declined, with Fast Retailing Co. and United Arrows Ltd. losing at least 2.5 percent.

Toshiba Corp. gained 0.7 percent after Kyodo reported it will pull out of TV manufacturing and cut jobs. Yahoo Japan Corp. lost 0.8 percent after Yahoo! Inc. -- its second-largest shareholder -- said it’s considering a spinoff of its stake in the Japanese website operator.

Japan’s producer prices index fell 3.6 percent in November from a year earlier, less than economist estimates for a 3.8 percent decline, the government reported.

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