Most Japan Stocks Fall on U.S. Jobs, Bank Concern; Inpex Rises

By Masaki Kondo

March 9 (Bloomberg) -- Most Japanese stocks fell as rising unemployment in the U.S. and the U.K. government’s takeover of Lloyds Banking Group Plc fanned concern the global economic slump will deepen.

Honda Motor Co., which gets more than half its profit from North America, sank 2.3 percent after U.S. unemployment jumped to the highest level in more than a quarter century. Insurer Tokio Marine Holdings Inc. sank 4 percent after London-based Lloyds said it will cede control to the government. Drugmakers declined as U.S. regulators sought additional data for Takeda Pharmaceutical Co.’s diabetes treatment. Inpex Corp., Japan’s biggest oil explorer, climbed 4.5 percent after crude advanced.

“We all knew the U.S. job market is in a harsh state,” Chisato Haganuma, a Tokyo-based strategist at Nomura Securities Co., said in an interview with Bloomberg Television. “Still, the outcome of the U.S. jobless report is really bleak.”

The Topix index slid 2.62, or 0.4 percent, to 718.77, with about three stocks falling for every two that advanced. The Nikkei 225 Stock Average added 19.14, or 0.3 percent, to 7,192.24 as of 10:09 a.m. in Tokyo.

The Nikkei has lost almost a fifth of its value this year on concern the global economic slowdown and credit turmoil will erode earnings. The gauge’s members traded at an average 0.83 times corporate net worth as of March 6, the lowest level on record dating back to July 1989, according to Nikkei Inc.

Current Account

Adding to evidence Japan’s recession is deepening, the government said today the nation had its first current-account deficit in 13 years in January. The deficit stood at 172.8 billion yen ($1.76 billion), compared with a median estimate by 22 economists for a gap of 15.3 billion yen.

The U.S. unemployment rate climbed to 8.1 percent in February, the Labor Department said on March 6, while economists had estimated 7.9 percent. Employers eliminated 651,000 jobs last month, and losses have now exceeded 600,000 for a third- straight month, the first time that’s happened since the tally began in 1939.

Honda, Japan’s No. 2 automaker, slid 2.3 percent to 2,100 yen, while smaller rival Mazda Motor Corp. lost 3.7 percent to 131 yen. Toyota Motor Corp., the biggest automaker globally, retreated 1.7 percent to 2,850 yen.

Tokio Marine, Japan’s No. 1 casualty insurer, sank 4 percent to 1,860 yen. Mitsui Sumitomo Insurance Group Holdings Inc. lost 6 percent to 1,864 yen. Both insurers were headed for a sixth-straight decline. Nissay Dowa General Insurance Co. lost 3.5 percent to 354 yen.

Share Sale

Lloyds, Britain’s biggest mortgage lender, said on March 7 it will relinquish control to the U.K. government in return for state guarantees covering 260 billion pounds ($367 billion) of risky assets. The government’s stake will increase to as much as 75 percent, making Lloyds the fourth U.K. bank to slip into state control since the government takeover of Northern Rock Plc in September 2007.

Shinsei Bank Ltd., the Japanese lender partly owned by investor Christopher Flowers, plunged 6.3 percent to 75 yen. The company will sell preferred shares to raise “several tens of billions of yen,” Shinsei said on March 6.

Takeda wasn’t traded as orders to sell outnumbered those to buy. The U.S. Food and Drug Administration said clinical data submitted by Takeda on its alogliptin medication was “insufficient” under new U.S. diabetes guidelines released in December, the Osaka-based company announced on March 6. Ratings on Takeda were cut to “sell” from “hold” at KBC Securities and to “neutral” from “buy” at Nomura Holdings Inc.

Inpex, Orix

Inpex jumped 4.5 percent to 648,000 yen, leading a gauge of resource companies to the biggest gain among the Topix’s 33 industry groups. Closest domestic rival Japan Petroleum Exploration Co. leapt 5.3 percent to 3,780 yen. Crude oil for April delivery jumped 4.4 percent to $45.52 a barrel in New York on March 6, the highest settlement in almost six weeks.

Orix Corp., Japan’s biggest non-bank financial company, climbed 4.6 percent to 2,145 yen after having lost 14 percent in the previous two days. Nomura raised the stock to “buy” from “neutral,” saying Orix has sufficient cash and concern about the company’s funding has been overdone.

Nikkei futures expiring in March inched up 0.6 percent to 7,210 in Osaka and gained 0.2 percent to 7,200 in Singapore.

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