Japan's Stocks Retreat on Asset Writedown Concern; GDP Declines

By Masaki Kondo

Aug. 13 (Bloomberg) -- Japan's stocks fell after new writedowns pushed global losses related to the U.S. mortgage market past the $500 billion mark and the domestic economy shrank, bringing the country to the brink of recession.

Nomura Holdings Inc. led brokerages to the biggest decline in almost two weeks, while Promise Co., Japan's largest consumer lender by outstanding loans, slumped for the first time in four days. T&D Holdings Inc. sent insurers to the lowest in five months after first-quarter profit tumbled by two-thirds.

The Nikkei 225 Stock Average declined 234.46, or 1.8 percent, to 13,069.14 as of 9:39 a.m. The broader Topix index fell 21.03, or 1.7 percent, to 1,250.39. Seven stocks fell for each that rose on the Topix.

Trading conditions ``have substantially deteriorated,'' JPMorgan Chase & Co. said in a regulatory filing yesterday when it announced new writedowns since July. The No. 2 U.S. bank by value expects the global economy ``to continue to be weak.''

Zurich-based UBS AG yesterday posted a fourth-straight quarterly loss on U.S. mortgage-related writedowns, pushing up worldwide losses from the collapse of the U.S. housing market to more than $500 billion.

Meanwhile, Japan's gross domestic product shrank an annualized 2.4 percent in the three months to June 30, the Cabinet Office reported today before markets opened. The result was in line with economist estimates.

Nomura, Japan's largest brokerage, retreated 2.7 percent to 1,532 yen, while Sumitomo Trust and Banking Co. fell 3.4 percent to 690 yen. Promise sank 4.2 percent to 2,595 yen.

Insurance Companies

T&D, the nation's second-largest publicly traded insurer, tumbled 6.6 percent to 5,540 yen, headed for the biggest decline since March 13. Sompo Japan Insurance Inc. dropped 3.9 percent to 944 yen, while Tokio Marine Holdings Inc dived 3.3 percent to 3,540 yen. Insurance companies, which had been the fourth-biggest winner among 33 Topix groups yesterday, posted the biggest decline today.

Nikkei futures expiring in September retreated 0.8 percent to 13,200 in Osaka and slumped 1 percent to 13,190 in Singapore.

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