Japanese Stocks Fall for Third Day After China Weakens Currencyby and
Yen strengthens against yuan to highest level since 2014
Japan Display, Sharp drop on report of iPhone production cut
Stocks fell in Tokyo for a third day as China again weakened its currency, undermining the competitiveness of Japanese exporters and raising concerns about the world’s second-largest economy. Apple Inc. suppliers tumbled on a report it may cut production.
The Topix sank 1.1 percent to 1,488.84 at the close in Tokyo, with all but three of its 33 industry groups falling. The Nikkei 225 Stock Average dropped 1 percent to 18,191.32, the lowest close since October. Shares erased early gains after China’s central bank lowered the reference rate on the yuan for a seventh day. The yen rose against the yuan in offshore trading to the strongest level since 2014.
“Until China stops weakening the yuan, global markets will struggle to stabilize,” said Koichi Kurose, Tokyo-based chief market strategist at Resona Bank Ltd. “The Chinese authorities may be trying to prop up the economy by boosting exports, but while that’ll help one part of China’s economy, it comes at the sacrifice of someone else. And Japan is an easy victim of such policy, given the overlap in many industries.”
Japanese companies that rely on China for a large part of their businesses declined. Air-conditioner maker Daikin Industries Ltd., which gets a fifth of sales from China, lost 2.5 percent. Rohm Co., an electronic components maker that relies on the country for a third of its revenue, sank 4 percent. Rohm counts Apple as one of its biggest customers.
Apple, the world’s most valuable company, tumbled in New York to its lowest level since October after the Nikkei Asian Review reported it will cut production of its latest iPhone model by nearly a third. Japanese suppliers to the company declined, with Japan Display Inc. losing 3.5 percent, while Alps Electric Co. sank 3.2 percent. Sharp Corp. slumped 3.3 percent.
Takata Corp. sank 7.7 percent after the chairman of the Japan Auto Manufacturers Associations said there are no discussions to rescue the troubled air-bag supplier. Shares surged 14 percent on Monday on a report that Japanese automakers may provide support to Takata.
Chipmaker Renesas Electronics Corp. advanced 3.9 percent after Kyodo reported its largest shareholder, a government backed fund, may sell its stake to Sony Corp. The fund invested in Renesas in 2013 to help finance a turnaround and still owns 69 percent, according to data compiled by Bloomberg. Renesas said in 2014 that the government’s stake was too big.
Sysmex Corp. rose 2.9 percent after JPMorgan Chase & Co. initiated coverage of the drugmaker with an overweight rating.
E-mini futures on the Standard & Poor’s 500 Index dropped 0.8 percent after the underlying measure gained 0.2 percent Tuesday.