Japan Stocks Fall, Send Nikkei Below 8,000, on Sony

By Masaki Kondo and Satoshi Kawano

(Corrects currency conversion in seventh paragraph.)

Oct. 24 (Bloomberg) -- Japan stocks sank, sending the Nikkei 225 Stock Average to the brink of 1982 levels, as Sony Corp. cut its forecast, Toyota Motor Corp.'s quarterly car sales fell for the first time in seven years, and the yen reached a 13-year high.

Sony, which gets three-quarters of its revenue outside of Japan, dived 14 percent to the lowest level since 1995, and Toyota, Japan's biggest carmaker, declined 6.4 percent. Canon Inc., the world's biggest digital-camera maker, and Panasonic Corp. plunged more than 12 percent as the surging yen cut the value of overseas sales.

``Financial markets have crashed and are out of control,'' said Yuji Ogino, an executive director at Meiji Dresdner Asset Management Co., which manages the equivalent of $28 billion in Tokyo. ``This crash is different from anything I've experienced since getting into this business in the late 1980s and it's hard to find ways to ride out the situation.''

The Nikkei 225 Stock Average declined 811.90, or 9.6 percent, to close at 7,649.08 in Tokyo, the lowest since April 2003 and just 41 points from the lowest since 1982. The broader Topix index fell 65.59, or 7.5 percent, to 806.11. The Nikkei posted a 12 percent drop for this week, while the Topix lost 9.9 percent.

The Nikkei has lost half its value this year as the credit crisis led to a slowdown in the global economy. Chances the Bank of Japan will cut interest rates by year-end to avert a prolonged recession grew to 24 percent from 3 percent a month ago, based on JPMorgan Chase & Co. calculations of interest-rate swaps.

TVs, Currency

Sony, the world's second-biggest maker of consumer electronics, yesterday slashed its forecast for annual operating profit by 57 percent, citing the stronger yen and a worsening market for televisions and cameras. UBS AG yesterday cut 12-month price estimates on Canon and Ricoh Co. by almost half, noting the appreciating Japanese currency and weakening demand.

The yen rose to as much as 95.34 per dollar, the highest level since August 1995, while surging against the euro to 121.75, the strongest in six years. A 1 yen change against the dollar alters Sony's annual profit by 4 billion yen ($42 million), the company said in May.

Nikkei futures expiring in December retreated 9 percent to 7,690 in Osaka and slid 8.7 percent to 7,680 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.