Most Japan Stocks Fall, Led by Commodity Producers on Oil Drop

By Masaki Kondo and Patrick Rial

Aug. 5 (Bloomberg) -- Most Japanese stocks fell, led by commodities producers after oil sank to a three-month low, denting their earnings prospects. Paper and tire makers surged.

Inpex Holdings Inc., Japan's largest oil explorer, sank to the lowest in six months, while Nippon Paper Group Inc. led its peers to a seven-month high as concerns eased that fuel costs will eat into profit. Seafood processor Nippon Suisan Kaisha Ltd. plunged the most on record after reporting a loss.


``The drop in crude isn't reflective of a global slowdown, but rather a reaction to the extreme prices we were seeing,'' said Koji Nakatsuka, a Tokyo-based fund manager at RCM Capital Management LLC, which manages $18.7 billion globally.

The Nikkei 225 Stock Average swung between gains and losses nine times and closed down 18.52, or 0.1 percent, to 12,914.66 in Tokyo. The broader Topix index dipped 0.54, or less than 0.1 percent, to 1,247.71. Seventeen of 33 industry groups on the Topix fell.

Crude oil yesterday dropped 3 percent to the lowest close since May 5, as Tropical Storm Edouard will avoid most offshore production facilities in the U.S. Gulf Coast as it approaches Texas.

Nikkei futures expiring in September slipped 0.4 percent to 12,900 in Osaka and lost 0.3 percent to 12,905 in Singapore.

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