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Topix Falls Fourth Day After Yen Jumps Most Since August

By Yoshiaki Nohara
April 09, 2014 2:51 AM EDT

Japan’s Topix index fell for a fourth day after the yen yesterday posted the biggest one-day gain against the dollar in seven months, weighing on the outlook for exporters’ earnings.

Sony Corp., a maker of consumer electronics that gets 68 percent of its revenue overseas, dropped 3.4 percent. Toyota Motor Corp., the world’s biggest carmaker, retreated 3.1 percent after recalling more than 6 million vehicles. Developers led declines among the 33 Topix industry groups after Deutsche Bank AG cut target prices for companies in the sector. Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping company, lost 5.5 percent after saying it plans to sell convertible bonds.

The Topix sank 2.1 percent to 1,150.44 at the close in Tokyo, the biggest loss since March 14, with all industry groups declining. The Nikkei 225 Stock Average slid 2.1 percent to 14,299.69. The yen fell 0.2 percent to 102.04 per dollar after surging 1.3 percent yesterday, the most since Aug. 27. The Bank of Japan refrained from boosting monetary stimulus yesterday, as forecast by all analysts in a Bloomberg News survey.

“Some people hoped for additional easing out of the BOJ meeting even though economists didn’t expect any action,” said Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp. “Investors are taking a pause in buying Japanese stocks and selling the yen.”

The Topix (TPX) has dropped 5.5 percent since capping a nine-day rally on April 3 for the longest streak of gains since 2011. The measure slumped 7.6 percent in the quarter ended March as a stronger yen and a sales tax bump in April made Japanese shares the worst performers in the developed world.

Stronger Yen

Exporters fell after the yen’s surge yesterday. Sony lost 3.4 percent to 1,895 yen. Mazda Motor Corp., a carmaker that gets about 73 percent of revenue abroad, lost 3.7 percent to 443 yen.

Toyota declined 3.1 percent to 5,450 yen after calling back 6.76 million vehicles globally. The five recalls involve 27 Toyota models, the Pontiac Vibe and the Subaru Trezia, the company said in an e-mail.

The Topix Real Estate Index slumped 4.5 percent, the most since June 13. Target prices for developers including Mitsubishi Estate Co., Mitsui Fudosan Co. and Sumitomo Realty & Development Co. were lowered by Deutsche Bank. Mitsubishi Estate fell 4.7 percent to 2,332 yen. Mitsui Fudosan slumped 5.4 percent to 3,012 yen, and Sumitomo Realty dropped 3.8 percent to 4,029 yen.

Mitsui O.S.K. slumped 5.5 percent to 376 yen after saying it plans to sell $500 million of convertible bonds overseas to raise money for capital expenditure.

Tech Rebound

Futures on the Standard & Poor’s 500 Index were little changed today. The equity measure rose 0.4 percent yesterday while the tech-heavy Nasdaq 100 Index gained 0.9 percent, rebounding from its worst three-day drop since 2011 with companies from Google Inc. to Facebook Inc. rallying.

Japanese technology shares rallied today. Yahoo Japan Corp. added 3 percent to 483 yen after the online-portal operator plunged 8.8 percent the prior two days. SoftBank Corp., a mobile carrier and Internet-company investor, gained 0.5 percent to 7,256 yen after slumping 11 percent the previous three days.

NTT Docomo Inc. dropped 2.3 percent to 1,544 yen after the Nikkei newspaper reported the mobile-phone operator may offer a fixed plan for unlimited calls and a half-priced data plan for families.

The Topix traded at 1.13 times book value today, compared with 2.59 for the S&P 500 and 1.88 for the Stoxx Europe 600 Index yesterday.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Tom Redmond, Jim Powell

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