Sept. 14 (Bloomberg) -- Japanese stocks dropped after Premier Wen Jiabao said indebted economies must “put their own houses in order,” damping speculation China would rescue Europe from a crisis that has sent global financial markets plunging.
Canon Inc., which depends on Europe for about a third of its sales, sank 4.1 percent. Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded lender, fell 1.8 percent. Sharp Corp. climbed 3.3 percent after JPMorgan Chase & Co. raised the electronics maker’s investment rating to “neutral.”
The Nikkei 225 Stock Average slipped 1.1 percent to 8,518.57 at the 3 p.m. close in Tokyo, reversing earlier gains of as much as 0.6 percent after Wen’s comments today at the World Economic Forum in the Chinese city of Dalian. The broader Topix slid 1.1 percent to 741.69.
“He put to rest any speculation China will buy more European debt,” said Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. in Tokyo. “Still nobody thought that the bond purchases would be enough to solve the crisis, anyway. There won’t be a resolution unless Europe addresses its debts in a fundamental way.”
The Topix has fallen 17 percent this year amid concern U.S. growth is sputtering and Europe’s debt crisis will damage the banking system, damping demand in two of Japan’s biggest export markets.
Wen Rebuffs Europe
Japanese stocks extended declines after Wen, facing calls to widen support for indebted European countries, signaled that developed nations should cut deficits and create jobs rather than relying on China to bail out the world economy.
“Countries must first put their own houses in order,” he said. “Developed countries must take responsible fiscal and monetary policies. What is most important now is to prevent the further spread of the sovereign debt crisis in Europe.”
Canon, which counts Europe as its biggest market, sank 4.1 percent to 3,295 yen, extending its decline after Wen’s comments. Kyocera Corp., an electronics maker that gets almost 20 percent of its sales in Europe, slumped 1.9 percent to 6,610 yen.
The euro weakened to as much as 104.59 yen, compared with 105.28 when the market opened today in Tokyo. A euro cuts the value income from the market for Japan’s exporters.
Japanese banks dropped on speculation Europe’s crisis will spread to the financial sector. Mitsubishi UFJ fell 1.8 percent to 325 yen and its closest rival Sumitomo Mitsui Financial Group Inc. slid 1.6 percent to 2,072 yen.
Among companies that gained, Sharp climbed 3.3 percent to 595 yen after JPMorgan boosted its investment rating on the maker of flat-screen panels to “neutral” from “underweight.” Sharp said in a statement yesterday it expects sales in Indonesia to grow 27 percent this fiscal year.
Bridgestone Corp. rose 1 percent to 1,683 yen. The tiremaker said a U.S. unit will raise prices of radial tires for trucks and buses by as much as 8 percent on Sept. 12 because of increasing material costs.
--With assistance from Toshiro Hasegawa in Tokyo. Editor: Jason Clenfield, Jim Powell.
To contact the reporters on this story: Norie Kuboyama in Tokyo at firstname.lastname@example.org; Toshiro Hasegawa in Tokyo at email@example.com.
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