Japan's Stocks Decline as Falling Oil Drags on Energy Explorers

(Bloomberg) -- Shares in Tokyo slipped, halting a three-day rally as crude oil declined and the yen gained against the greenback.

Oil tumbled into its first bear market in 10 months on Tuesday, pulling energy-related stocks down in Japan amid concerns unceasing production from U.S. shale fields is overwhelming OPEC efforts to ease a global supply glut. Banks and chemical products makers weighed the most on the benchmark Topix. Trading volume on the Topix was 12 percent below the 30-day average.

“Japanese stocks have risen for three days, and with the overseas environment a little weak, it’s easier for profit-taking to take the lead,” said Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo. “It’s difficult to judge whether the oil drop is due to a slowdown in growth or if it’s merely a matter of oversupply.”

“Much of today’s decline is due to profit-taking” after the past few day’s gains, said Hitoshi Asaoka, a strategist at Asset Management One Co. in Tokyo. “Japanese stocks’ sense of cheaper valuation seems to be approaching its limit.”

Summary

• Topix -0.4% to 1,611.56 at the close in Tokyo
• Nikkei 225 -0.5% at 20,138.79
• Yen +0.2% at 111.23 per dollar
• Cyberdyne +7.8% after filing for U.S. FDA approval to market Medical HAL
• Dentsu -1.6%; cut to neutral from overweight at MUFJ-MS
• Horiba +2.8%; raised to overweight from neutral at MUFJ-MS
• Japan Tobacco -1.5%; downgraded to underperform from hold at Jefferies
• Nippon Electric Glass +2.5%; raised to buy at Citi
• Taiyo Yuden +3.1%; Taiwan’s Economic Daily News reports competitor Yageo will raise prices for some capacitors 15%-30%
• Tsukiji Uoichiba +9.1%; Tokyo Governor Yuriko Koike yesterday announced plans to move fish market temporarily to Toyosu while redeveloping existing land in Tsukiji

For more on Japan markets:
Foreigners Make $27 Billion Blunder in Missing Japan Stock Rally
As Takata Faces Bankruptcy, Cash Is Dwarfed by Obligations
Yen Gains on Haven Demand After Treasury Yields, Equities Slide
Coming Lack of Dissent at BOJ Raises Risks, Says Ex-Board Member

To contact the reporters on this story: Yuko Takeo in Tokyo at ytakeo2@bloomberg.net, Nao Sano in Tokyo at nsano3@bloomberg.net.

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Kurt Schussler, Naoto Hosoda