Japan Stocks Slump on Plunge in U.S. Home Prices; Toyota Drops

By Masaki Kondo

Nov. 26 (Bloomberg) -- Japan’s stocks fell as concern falling home prices will curb U.S. spending overshadowed the Federal Reserve’s $800 billion measure to unfreeze credit markets.

Toyota Motor Corp., which gets about a half its profit from North America, lost 2.9 percent, snapping a two-day gain. Inpex Corp., Japan’s largest oil explorer, sank 3.1 percent after crude dropped for the first time in three days. Panasonic Corp. tumbled 4.2 percent on a newspaper report Goldman Sachs Group Inc. opposed the electronics maker’s bid for Sanyo Electric Co.

The Nikkei 225 Stock Average declined 58.46, or 0.7 percent, to 8,265.47 as of 9:49 a.m. in Tokyo. The broader Topix index fell 10.89, or 1.3 percent, to 820.69. In New York, the Standard & Poor’s 500 Index swung between gains and losses more than 20 times before closing 0.7 percent higher.

“Investor sentiment is drifting between optimism about U.S. policies and pessimism about the market outlook,” Hiroichi Nishi, a Tokyo-based equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television.

Three-quarters of stocks on the Topix have sunk below their book value, with 30 percent of the gauge’s members having lost more than half its value this year. The collapse of the U.S. housing market has cost financial firms almost $1 trillion in losses and writedowns, prompting banks to hoard cash and consumers to reduce spending.

The S&P/Case-Shiller home-price index tumbled 17.4 percent in September from a year earlier, the fastest pace on record, as rising foreclosures in the U.S. pushed down property values.

Fed’s Measures

To unfreeze credit for homebuyers, the Fed will purchase as much as $600 billion of debt issued or backed by government- chartered housing-finance companies, the central bank said yesterday. It will also establish a $200 billion program to shore up consumer and small-business loans.

Toyota dived 2.9 percent to 3,040 yen. Closest rival Honda Motor Co. lost 2.4 percent to 2,040 yen, while Canon Inc., the world’s biggest camera maker, lost 1.7 percent to 2,855 yen. Makers of electronics and cars were the biggest contributors to the Topix’s slump.

Inpex slid 2.9 percent to 505,000 yen, and Japan Petroleum Exploration Co., the nation’s second-largest oil explorer, fell 5.4 percent to 3,360 yen. Mitsui & Co., which gets more than half its earnings from commodities, retreated 2.8 percent to 733 yen.

Crude oil for January delivery declined 6.8 percent to close at $50.77 a barrel yesterday on speculation a U.S. government report will show inventories climbed last week. Futures have dropped 66 percent since reaching a record $147.27 on July 11.

Panasonic, Sanyo

Panasonic, the world’s largest maker of consumer electronics, tumbled 4.2 percent to 1,338 yen, while Sanyo edged up 0.6 percent to 157 yen. Goldman, one of the three top holders of Sanyo’s preferred shares, opposed Panasonic’s bid for Sanyo as the offer price of 120 yen ($1.26) a share was too low, the Nikkei newspaper reported today.

Nikkei futures expiring in December retreated 1 percent to 8,260 in Osaka and slumped 0.7 percent to 8,265 in Singapore.

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