By Patrick Rial
March 12 (Bloomberg) -- Japanese stocks fell, sending the Topix to a 25-year low, as data on the economic contraction and a surging yen fueled concern earnings will deteriorate.
Nippon Telegraph & Telephone Corp. lost 5.8 percent after Mizuho Securities Co. lowered its rating, citing the risk to earnings from the recession. East Japan Railway Co., Japan’s No. 1 rail operator, sank 3.8 percent after Nikko Citigroup Ltd. cut its profit forecast. Toshiba Corp. tumbled 4.6 percent after the yen jumped to a two-week high.
Gross domestic product in the last quarter of 2008 fell the most since 1974, revised figures confirmed today. A coming inventory correction will cause the current quarter’s figure to be even worse, according to Daiwa Institute of Research Ltd.
The Nikkei 225 Stock Average lost 177.87, or 2.4 percent, to 7,198.25 at the close of trading in Tokyo. The broader Topix index declined 21.35, or 3 percent, to 700.93. The gauge earlier fell below 700 and finished at the lowest since December 1983.
“Unless we get some real evidence that the economy is on a path to recovery, there’s no reason for the market to start climbing,” said Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co., which oversees about $96 billion of assets. “The talk these days is that the January to March quarter is going to be the worst yet.”
The Nikkei surged the most in six weeks yesterday, joining a global stocks rally after Citigroup Inc. said it had a profit in the first two months of this year. The gauge is down 19 percent so far in 2009, extending last year’s record drop as the global economy slipped into recession.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
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