Japan's Stocks Fall on Spending, Wage Concern; Nippon Oil Drops

By Kanoko Matsuyama and Toshiro Hasegawa

Sept. 1 (Bloomberg) -- Japan's stocks fell the most in two weeks on concern demand for cars and electronics will fall as spending slows and wages stagnate.

Honda Motor Co., Japan's second-biggest carmaker, dropped the most in a month after U.S. consumer spending declined and domestic auto sales fell in August. Sharp Corp., Japan's biggest maker of liquid crystal display TVs, declined 3.1 percent, after the nation's wages grew at the slowest pace all year. Nippon Oil Corp., Japan's largest refiner, tumbled 3.8 percent as crude prices advanced, raising its production costs.

``We can't expect consumer spending to improve soon,'' said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which manages about $94 billion. ``It will be difficult for companies with high dependence on exports, such as automakers, to regain revenue.''

The Nikkei 225 Stock Average dropped 238.69, or 1.8 percent, to close at 12,834.18 in Tokyo. The broader Topix index declined 24.07, or 1.9 percent, to 1,230.64. Both gauges retreated the most since Aug. 19, and almost eight shares fell for every one that rose on the Topix.

Purchases in the U.S. rose 0.2 percent, one-third the pace in June, the Commerce Department said on Aug. 29 in Washington, while prices surged the most in 17 years. Japan's wages grew in July at the slowest pace all year, the Labor Ministry said today.

Sales of cars, trucks and buses fell 15 percent to 193,902 from a year earlier, the Japan Automobile Dealers Association said in a statement today.

To contact the reporter for this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net.