Japan Stocks Fall, Led by Oil Explorers as Earnings Season Peaks

  • Earnings results from Inpex to Sumco disappoint investors
  • More than 400 Topix index companies report earnings today

Japanese shares fell, led by fishing companies and energy shares, as earnings from Inpex Corp. to Sumco Corp. disappointed investors.

The Topix index dropped 1.3 percent to 1,320.19 at the close in Tokyo, paring its first weekly gain in three weeks to 1.7 percent. More than three shares fell for each that rose. The Nikkei 225 Stock Average lost 1.4 percent to 16,412.21. The yen traded at 108.73 per dollar after weakening 0.6 percent on Thursday. Japan’s earnings season peaks on Friday, with more than 400 Topix companies reporting.

“There’s an overall sense of concern toward earnings,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui. “We’ve already seen earnings at exporters fall from effects from the yen. Of course, losses will widen if we see any more strength in the yen, so there’s plenty of caution.”

Energy explorer Inpex fell 4.2 percent after forecasting a 39 percent loss in operating profit for the year ending March 2017, below analyst estimates. Sumco sank 6.8 percent after the semiconductor-parts maker reported a 59 percent decline in operating profit in the quarter ended March against a year earlier. Audio-equipment maker Pioneer Corp. plunged 13 percent, its worst loss since the 2011 Fukushima nuclear meltdown, after reporting full-year net income and operating profit that missed forecasts.

iPhone Demand

Apple Inc. sank to the lowest close since June 2014 in the U.S. after the Nikkei reported that shipments of iPhone chips for the remainder of the year will likely shrink versus a year earlier. The world’s largest company was at one point last year worth about a quarter more than all Japanese technology companies combined, but that ratio has fallen as demand for smartphones has stalled.

“We’re losing sight of Apple’s growth story. We should keep a close eye on some electronic shares related to Apple” in Tokyo trading, said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo.

Suppliers to the iPhone maker dropped in Tokyo trading, including Alps Electric Co., which fell 3.2 percent, and TDK Corp., which lost 2.3 percent. Japan Display Inc., which provides screens for smartphones and tablets, sank 6.1 percent after earnings disappointed and it forecast sales that were below levels expected by analysts.

Tokuyama Corp. surged by a record 30 percent after the maker of construction materials reported operating profit that beat estimates in the year ended March.

Futures on the S&P 500 Index fell 0.4 percent. The underlying U.S. equity gauge closed flat on Thursday after a whipsaw session, as oil staged a rebound to offset losses by Apple, and investors awaited additional economic data for clues on the health of the world’s largest economy.

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