Bloomberg News

Japan’s Topix Falls, Ending 3-Day Rally Amid U.S. Growth Concern

September 30, 2011

Sept. 30 (Bloomberg) -- Japanese stocks edged lower, ending a three-day winning streak on the Topix index, after mixed U.S. economic reports failed to assuage concern the world’s largest economy is slowing.

Toyota Motor Corp., which counts North America as its largest market, dropped 0.5 percent. Sumitomo Mitsui Financial Group Inc. slipped 0.6 percent even after German lawmakers yesterday voted to expand a euro-region rescue fund that may help avert a financial crisis. Sumitomo Electric Industries Ltd. plunged 8 percent on concern it will be the next Japanese maker of wire harnesses to be hit with U.S. fines for price fixing.

The Topix slipped 0.2 percent to 761.17 at the 3 p.m. close of trading in Tokyo. The Nikkei 225 Stock Average was little changed at 8,700.29 after earlier falling as much as 0.6 percent. For the week, the gauge gained 1.6 percent amid signs Europe’s policy makers may resolve the region’s debt-crisis.

“Concern about the U.S. economic slowdown are lingering, and we need to see more data,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “We got a reprieve from Europe’s debt crisis.”

Futures on the Standard & Poor’s 500 Index fell 0.5 percent today. The index rose 0.8 percent in New York yesterday after applications for jobless benefits dropped to the lowest since April and revised gross domestic product numbers showed the U.S. economy grew faster in the second quarter than initially estimated.

‘Sentiment Ebbs’

A separate report showed contracts to purchase previously owned U.S. homes fell for a second month in August, indicating the housing market that triggered the recession has yet to recover.

“Sentiment ebbs and flows very quickly nowadays,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “People are still very uncertain about the macro-economic outlook.”

The Topix fell 10 percent this quarter, its worst performance since the three months through June 2010. Stocks have fallen amid concern sputtering U.S. growth and Europe’s debt crisis will stifle demand in two of Japan’s biggest markets. For the month the index dropped 1.2 percent.

Japanese stocks slipped today after a report showed industrial production rose less than expected last month, signaling a strong yen and slowing growth abroad are weighing on the nation’s recovery from the March 11 earthquake and tsunami. Factory output increased 0.8 percent from July, less than the 1.5 percent gain forecast by economists in a Bloomberg survey.

Toyota, Sony

Toyota fell 0.5 percent to 2,688 yen. Sony Corp., Japan’s No. 1 exporter of consumer electronics, declined 0.5 percent to 1,507 yen.

Japanese banks fell even after Germany’s lower house voted to expand a European bailout fund. Confidence that the 440 billion euro ($599 billion) facility will be in place by mid- October allows the region’s finance chiefs next week to discuss enacting a permanent rescue fund that provides more capital and tools for managing defaults.

“I’m not convinced that this bailout package is going to be remotely enough for the euro zone itself,” Wilbur Ross, the billionaire chairman of private-equity firm WL Ross & Co., said yesterday in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “I think it should start with a ‘T,’ not a ‘B,’” he said, referring to trillions instead of billions.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 0.3 percent to 354 yen. Sumitomo Mitsui Financial slipped 0.6 percent to 2,206 yen.

Sumitomo Electric Industries, a maker of wire harnesses under investigation in the U.S. for price fixing, plunged 8 percent to 917 yen. The stock dropped after smaller rival, Furukawa Electric Co., agreed to plead guilty and pay a $200 million fine for its role in a bid-rigging conspiracy involving the sale of parts to automakers. Furukawa dropped 5.3 percent to 213 yen.

--With assistance from Anna Kitanaka in Tokyo. Editor: Jason Clenfield, Jim McDonald.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net.


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