Japanese Stocks Fall on Wage Drop, U.S. GDP; Inpex Declines

By Masaki Kondo

March 2 (Bloomberg) -- Japanese stocks fell, sending the Nikkei 225 Stock Average to its sharpest drop in six weeks, as contractions in the U.S. economy, domestic wages and commodities prices signaled a deepening of the global recession.

Canon Inc., which gets a third of its sales from the Americas, sank 4.9 percent after the U.S. gross domestic product shrank the most in a quarter century. Isetan Mitsukoshi Holdings Ltd., Japan’s No. 1 department store operator, plunged 7 percent as the nation’s wages fell for a third month. Mitsubishi UFJ Financial Group Inc. lost 6.8 percent after a government move that cut shareholders’ stake in Citigroup Inc. drove down U.S. bank stocks. Inpex Corp. lost 7.8 percent after crude fell.

“We don’t know yet how long this global recession will last,” said Hisakazu Amano, head of fund management at Tokyo- based T&D Asset Management Co., which oversees about $39 billion. “With the market dominated by an atmosphere of malaise and despair, there are few people who dare to buy.”

The Nikkei 225 declined 288.27, or 3.8 percent, to close at 7,280.15 in Tokyo, the steepest drop since Jan. 15. The broader Topix index fell 22.12, or 2.9 percent, to 734.59, with all but one of its 33 industry groups retreating.

The Nikkei lost 15 percent this year through Feb. 27 as concern grew that government and central bank measures will fail to prevent a prolonged global economic slump. Almost 50 percent of the gauge’s constituents have seen their values fall by at least half in the 12 months to Feb. 27, according to data compiled by Bloomberg news.

The Commerce Department said on Feb. 27 that the U.S. economy shrank at a 6.2 percent annual pace in the three months to December, the most since 1982 and more than the government had previously estimated. The same day, Standard & Poor’s 500 Index fell 2.4 percent to a 12-year low in New York.

Japanese wages sank 1.3 percent in January from a year earlier, the third-straight monthly decline, the Labor Ministry said today. Overtime pay retreated at the fastest pace ever, indicating manufacturers are paring output.

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