Japan Stocks Fall on Lehman's Loss, Decline in Machine Orders

By Masaki Kondo

Sept. 11 (Bloomberg) -- Japan stocks dropped on concern falling asset values will batter global financial companies and the slowing economy will cut investment in manufacturing.

Nomura Holdings Inc., Japan's biggest brokerage, lost 4.3 percent after Lehman Brothers Holdings Inc. reported a record loss. Mitsubishi UFJ Financial Group Inc., the nation's largest listed bank, slumped 3.2 percent. Fanuc Ltd., the world's biggest maker of industrial robots, fell after the Japan's machine orders dropped last month.

``Investors expected positive news from Lehman, which, as it turns out, didn't deliver anything good,'' Mitsushige Akino, who oversees about $468 million at Ichiyoshi Investment Management Co. in Tokyo, said in an interview with Bloomberg Television.

The Nikkei 225 Stock Average retreated 145.23, or 1.2 percent, to 12,201.40 as of 9:27 a.m. in Tokyo. The broader Topix index slumped 15.04, or 1.3 percent, to 1,177.34. More than two stocks fell for each that rose on the Topix.

Lehman, the fourth-biggest U.S. brokerage, yesterday reported a $3.9 billion third-quarter loss, the biggest in its 158-year history, and 77 percent wider than analysts had estimated. That helped push global writedowns and credit losses caused by the collapse in the U.S. mortgage market to $511 billion, according to figures compiled by Bloomberg News.

Nomura slid 4.3 percent to 1,465 yen, while Shinko Securities Co. sank 3.1 percent to 310 yen. Mitsubishi UFJ dropped 3.2 percent to 839 yen and Sumitomo Mitsui Financial Group Inc., Japan's third-biggest listed bank, retreated 3.4 percent to 658,000 yen. Brokerages and banks were the biggest losers among 33 industry groups on the Topix.

Fanuc lost 1.8 percent to 7,550 yen and Sumitomo Heavy industries Ltd. declined 2.8 percent to 481 yen. Mitsubishi Heavy Industries Ltd. fell 2.2 percent to 480 yen.

Machine Orders

Machinery orders fell in July for a second month with a 3.9 percent drop from June, the Cabinet Office today said before markets opened. Economists had estimated orders, an indicator of capital spending in the next three to six months, fell 3.6 percent.

Softbank Corp., Japan's third-biggest mobile-phone carrier, extended its gain to a second day, jumping 4.2 percent to 1,713 yen after Morgan Stanley raised its rating on the stock to ``overweight/in-line'' from ``equal-weight/in-line.'' Softbank traded at 16 times its earnings on Sept. 9, the lowest in at least a year.

Nikkei futures expiring in September retreated 1.1 percent to 12,190 in Osaka and slumped by the same degree to 12,195 in Singapore.

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