Japan Stocks Drop as Europe Impasse Weighs on Banks, Exporters - BusinessWeek

Oct. 4 (Bloomberg) -- Japanese stocks fell, with the Nikkei 225 Stock Average dropping to its lowest level in a week, as discord among European policy makers fueled concern the region will fail to resolve its debt crisis, stalling global growth.

Mitsubishi UFJ Financial Group Inc., Japan's largest lender by market value, fell 3.8 percent, its steepest drop in over six months after financial shares plunged in New York. Mitsubishi Corp., Japan's biggest trading company, dropped 5.7 percent on lower commodity prices. Kawasaki Kisen Kaisha Ltd. tumbled 4.5 percent after the shipping line said it expects a loss because of slumping cargo rates.

The Nikkei 225 fell 1.1 percent to 8,456.12 at the 3 p.m. close of trading in Tokyo, its lowest close since Sept. 26. The measure tumbled 11 percent last quarter, its worst performance since the three months ended June 2010. The Topix lost 1.5 percent to 736.18 today, with about four shares falling for each that gained.

“If we don't get a resolution in Greece, we may see a disorderly default,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd. which oversees the equivalent of $68 billion in assets. “The politicians are all over the place. Stocks are pricing in a scenario where the financial crisis spreads in Europe, the U.S. economy worsens and it leads to a deterioration in the global economy.”

The Standard & Poor's 500 Index fell 2.9 percent yesterday, dropping to a one-year low, led by financial shares amid concern that Europe's debt crisis will spill over into the banking system. Futures on the S&P 500 climbed 0.6 percent today.

Greek Crisis

German Finance Minister Wolfgang Schaeuble yesterday opposed moves to further increase the scale of a euro-area rescue fund until three countries approve a previous upgrade. Slovakia, the Netherlands and Malta have yet to ratify an earlier decision to expand the European Financial Stability Facility to 440 billion euros ($584 billion).

Europe's financial leaders are fighting on multiple fronts, trying to extinguish the Greek crisis while insulating Italy and Spain and shoring up banks that the International Monetary Fund says face as much as 300 billion euros in credit risk.

Japanese lenders dropped. Mitsubishi UFJ Financial dropped 3.8 percent to 331 yen, its steepest decline since March 29. Sumitomo Mitsui Financial Group Inc., the country's second- largest bank by market value, dropped 1.5 percent to 2,114 yen.

Slower Global Growth

“The main thing that's driving down the market is Europe,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “There's this worry that Europe is going to implode and drag down the U.S. with it. It's not good for Asia.”

Goldman Sachs Group Inc. lowered its forecast for world growth to 3.5 percent next year from a previous outlook of 4.3 percent, citing Europe's deterioration. The U.S. also faces a 40 percent chance of a recession, the investment bank said.

More than $10 trillion was wiped from global equity markets last quarter. Benchmark measures for 36 out of 45 nations in the MSCI All-Country World Index posted declines of 20 percent or more from their peaks, meeting the common definition of a bear market, according to data compiled by Bloomberg. Besides the U.S., only two other developed markets -- the U.K. and New Zealand -- haven't dropped 20 percent or more from their most- recent highs.

Mitsubishi Corp.

Trading firms and commodity-related companies declined in Tokyo after oil and copper prices fell. Mitsubishi Corp., which gets about 43 percent of its revenue from commodities, slumped 5.7 percent to 1,429 yen, the biggest decline on the Nikkei 225. Smaller rival Mitsui & Co. lost 2.9 percent to 1,043 yen.

Crude oil tumbled 2 percent in New York yesterday to its lowest level in more than a year amid concern that slower growth will mean less fuel consumption. Copper futures for December delivery fell below $3 a pound to a 14-month low on signs that demand for industrial metals will wane.

Kawasaki Kisen dropped 4.5 percent to 148 yen after saying it expects a net loss of 30 billion yen in the fiscal year ending March 31 because of slumping shipping rates and a drop in the value of shares it owns. Japan's third-largest shipper by sales had forecast a profit of 2 billion yen.

Komatsu Ltd., the world's second-largest maker of construction and mining equipment, slumped 5.1 percent to 1,540 yen. Morgan Stanley MUFG Securities Co. lowered its target price on Komatsu to 2,900 yen from 3,400 yen, citing falling revenue from China.

Automakers, still affected by parts shortages stemming from Japan's March 11 earthquake disaster, declined after reporting falling sales in the U.S. Toyota Motor Corp. dropped 2.5 percent to 2,568 yen. The automaker said sales plunged 17 percent last month in the U.S., its largest market.

Honda Motor Co.'s U.S. sales slipped 8 percent, exceeding a 6.1 percent estimate by five analysts' in a Bloomberg survey. Shares of Honda lost 2.8 percent to 2,202 yen.

--With assistance from Yoshiaki Nohara and Toshiro Hasegawa in Tokyo. Editors: Jason Clenfield, Jim Powell.

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Japan Stocks Rise First Day in Five as U.S. Economic Data Boosts Exporters - Bloomberg

Canon stocks rise. Photographer: Toshiyuki Aizawa/Bloomberg

Aug. 11 (Bloomberg) -- Robert Howe, chief executive officer of hedge fund manager Geomatrix (HK) Ltd., talks about his investment strategy for Asian stocks. Howe also discusses Federal Reserve monetary policy and Europe's sovereign debt crisis. He speaks with Rishaad Salamat, Susan Li and Phillip Yin on Bloomberg Television's "Asia Edge." (Source: Bloomberg)

Aug. 10 (Bloomberg) -- Erwin Sanft, head of China and Hong Kong research at BNP Paribas SA, talks about global stocks and economies. Sanft, who also discusses Federal Reserve monetary policy and China's currency policy, speaks in Hong Kong with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Japanese stocks rose for the first time in five days as exporters climbed on speculation the U.S. Federal Reserve will announce additional measures to shore up the recovery in the world’s biggest economy.

Canon Inc. (7751), a camera maker that gets about a quarter of its sales in the Americas, gained 3 percent. Nintendo Co., a gamemaker that has lost 45 percent this year, jumped on speculation the shares have been oversold. Inpex Corp., Japan’s No. 1 energy explorer, gained 2.9 percent after oil prices rose.

The Nikkei 225 (NKY) Stock Average rose 1.2 percent to 8,733.01 at the 3 p.m. close of trading in Tokyo. The gauge snapped its longest losing streak since March amid optimism Fed Chairman Ben S. Bernanke will announce a plan to stimulate the economy when he speaks on Aug. 26 at a meeting of central bankers in Jackson Hole, Wyoming. At last year’s meeting, Bernanke sparked a rally in equities by signaling the Fed would buy more bonds -- a strategy known as QE2 -- to help prop up asset prices.

Bernanke “may signal some kind of measure that’s positive for stocks, even if he doesn’t go as far as QE3,” said Masatsugu Okeya, a fund manager at Chiba-Gin Asset Management Co. “The market has already priced in most of the negative news during the recent decline.”

The Topix index rose 1 percent to 750.39 after yesterday falling to the lowest level since March 2009. The gauge has lost about 12 percent this month 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. The decline has cut the price of shares on the index to 0.89 times book value, the lowest since March 2009.

“Stocks are likely to be bought as valuations and technical patterns indicate they’ve been oversold,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. “Risk aversion came to a halt in the U.S. and European markets yesterday.”

Futures on the Standard & Poor’s 500 Index climbed 1.2 percent today. The index closed little changed yesterday in New York, paring gains in the last 15 minutes of trading as Goldman Sachs Group Inc. plunged on a report that Chief Executive Officer Lloyd Blankfein hired a defense attorney.

Japanese exporters to the U.S. advanced. Canon, the world’s biggest camera-maker, rose 3 percent to 3,600 yen. Toyota Motor Corp. (7203), which counts North America as its biggest market, climbed 2.3 percent to 2,763 yen. The automaker also rose after saying it would collaborate with Ford Motor Co. to develop a hybrid system for pickup trucks.

Nintendo gained 8.4 percent to 13,100 yen. The world’s biggest gamemaker rebounded after the share’s 50-day moving average fell to the lowest level since January 2006.

“Nintendo’s bounce is representative of the technical rebound in the market as a whole,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “There’s a sense that investors are done unloading shares after one piece of bad news after another.”

Utilities rose after Finance Minister Yoshihiko Noda, a candidate to replace Japan’s Prime Minister Naoto Kan, said the country may not be able to do without nuclear power. Kansai Electric Power, the country’s second-largest utility, gained 2.8 percent to 1,409 yen. Chubu Electric Power Co., the third biggest, advanced 1.9 percent to 1,487 yen.

Although Japan should reduce its dependence on nuclear power, the country needs to “‘carefully examine’’ whether it’s possible to meet its energy needs without it, Noda said today in Tokyo. Kan, who said he will step down as early as Aug. 26 if key legislation is passed, has said atomic power should be phased out following the worst nuclear disaster since Chernobyl.

Japan’s power companies increased spending on fuels by 1 trillion yen ($13 billion) in the three months ended June 30, as they increased thermal generation to offset closures of nuclear plants, national broadcaster NHK reported this month.

Energy companies advanced after crude prices gained for a second day as investors bet on increased demand in the U.S., the world’s biggest consumer of the fuel. Inpex Corp (1605) gained 2.9 to 469,500 yen. Smaller Japan Drilling Co. rose 2.1 percent to 2,602 yen.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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Asian Shares End Mostly Lower; Japan Exporters Remain Under Pressure - Wall Street Journal

By V. Phani Kumar in Hong Kong and Virginia Harrison in Sydney

HONG KONG (MarketWatch)--Most Asian markets surrendered gains to end lower Monday as worries about the European debt crisis and global economic outlook kept investors on edge.

"Weak growth outlook remains the headwind for risky assets. We expect no lasting respite from the ongoing risk aversion until a clear direction on additional [U.S. Federal Reserve] stimulus emerges and until [there's a] significant reduction in euro-zone debt anxiety," said Prakash Sakpal, an economist at ING Financial Markets Research.

Japan's Nikkei Stock Average ended 1.0% lower, as hopes that authorities would ...

By V. Phani Kumar in Hong Kong and Virginia Harrison in Sydney

HONG KONG (MarketWatch)--Most Asian markets surrendered gains to end lower Monday as worries about the European debt crisis and global economic outlook kept investors on edge.

"Weak growth outlook remains the headwind for risky assets. We expect no lasting respite from the ongoing risk aversion until a clear direction on additional [U.S. Federal Reserve] stimulus emerges and until [there's a] significant reduction in euro-zone debt anxiety," said Prakash Sakpal, an economist at ING Financial Markets Research.

Japan's Nikkei Stock Average ended 1.0% lower, as hopes that authorities would ...

View the original article here