Japan Stocks Fall on Developer's Bankruptcy; Inpex Rises on Oil

By Masaki Kondo

Aug. 27 (Bloomberg) -- Japan stocks fell after developer Sohken Homes Co. filed for bankruptcy, raising concern tighter lending from banks will trigger more failures.

Sohken wasn't traded as orders to sell exceeded those to buy. Isuzu Motors Ltd., Japan's largest maker of light-duty trucks, dropped 3.1 percent after Mitsubishi UFJ Securities Co. cut its price estimate by 17 percent. Inpex Holdings Inc., Japan's largest oil and gas explorer, gained for the first time in three days after crude extended its gain to a second day.

The Nikkei 225 Stock Average fell 59.07, or 0.5 percent, to 12,719.64 at 9:48 a.m. in Tokyo. The broader Topix index retreated 4.71, or 0.4 percent, to 1,224.64. Almost three stocks declined for each that rose on the Topix.

The deteriorating Japanese property market and difficulty refinancing debt have been exacerbated by failures of other developers, Sohken said yesterday after markets shut, as it filed for court protection from creditors with 33.9 billion yen ($309 million) in liabilities. Bankruptcies among Japanese property companies more than doubled to 60 in July from a year earlier, according to Tokyo Shoko Research Ltd.

Mitsubishi Estate Co., Japan's second-biggest developer, lost 1.9 percent to 2,380 yen, while Sumitomo Realty & Development Co. sank 1.6 percent to 2,210 yen. Condominium developer Touei Housing Corp. plunged 8.8 percent to 260 yen. Developers posted the second-biggest drop after automakers.

Isuzu dived to 401 yen after Mitsubishi UFJ analyst Shotaro Noguchi lowered his 12-month price target on the stock to 500 yen. Honda Motor Co., Japan's second-biggest carmaker, slipped 1.9 percent to 3,540 yen.

Hurricane Gustav

Inpex advanced 1.7 percent to 1.147 million yen, sending mining companies to the biggest gain among 33 industry groups on the Topix. Japan Petroleum Exploration Co., the second biggest, rose 2 percent to 7,160 yen.

Crude oil for October delivery rose 1 percent to $116.27 a barrel on the New York Mercantile Exchange yesterday on forecasts showing Hurricane Gustav may enter the Gulf of Mexico, home to more than a fifth of U.S. oil production. The contract fell 31 cents to $115.96 at 8:42 a.m. Sydney time.

Nikkei futures expiring in September retreated 0.4 percent to 12,730 in Osaka and slumped 0.5 percent to 12,725 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.