Japan Stocks Dip After Bank Surge Yesterday; Acom Set to Jump

By Masaki Kondo

Sept. 9 (Bloomberg) -- Japan's stocksfell after investors viewed yesterday's biggest advance in domestic bank shares in 16 years as excessive.

Chuo Mitsui Trust Holdings Inc., which rose 15 percent yesterday, fell 1.6 percent. Mizuho Trust & Banking Co. retreated 3.1 percent after the U.S. government's takeover of mortgage lenders Fannie Mae and Freddie Mac failed to quell concern financial market turmoil will linger. Acom Co. was poised to leap after Mitsubishi UFJ Financial Group Inc. said it will more than double its stake in the consumer lender.

``Investors will likely take a cautious stance'' after yesterday's rally,Yoshinori Nagano, a Tokyo-based senior strategist at Daiwa Asset Management Co., which manages the equivalent of $94 billion, said in an interview with Bloomberg Television. ``There's still pessimism that the takeover won't solve fundamental problems in the financial industry.''

The Nikkei 225 Stock Average declined 114.41, or 0.9 percent, to 12,510.05 as of 9:04 a.m. in Tokyo. The broader Topix index fell 8.22, or 0.7 percent, to 1,208.19.

Yesterday, the Topix Banks Index rose the most since April 1992 after the biggest jump in mortgage defaults in at least three decades prompted the U.S. government to take over Fannie and Freddie, which make up almost half the U.S. home-loan market.

Mitsubishi UFJ, the nation's largest publicly traded bank, will spend about 153 billion yen to more than double its stake in consumer lender Acom, the bank said yesterday.

Nikkei futures expiring in September retreated 1.2 percent to 12,500 in Osaka and slumped 0.7 percent to 12,505 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo atmkondo3@bloomberg.net.