Tokyo - Japan’s Topix index fell as the yen advanced amid expectations the US will maintain stimulus into next year.
Shares had earlier erased losses after China injected funds into the financial system.
Nissan Motor Co., which counts North America as its biggest sales market, sank 0.8 percent. Komatsu Ltd. plunged 8.1 percent after the maker of excavators and bulldozers cut its full-year forecasts below analyst estimates.
Fujikura Ltd. jumped 13 percent after the cable maker said operating profit surged, fueling bets it will beat its full-year forecasts.
The Topix lost 0.4 percent to 1,193.50 at the close in Tokyo.
The gauge rose as much as 0.1 percent earlier after the People’s Bank of China resumed reverse-repurchase contracts.
The measure yesterday climbed by the most since September 19.
The Nikkei 225 Stock Average declined 0.5 percent today to 14,325.98.
The Federal Reserve starts a two-day meeting today.
The yen gained 0.1 percent to trade at 97.56 per dollar.
“While the Fed delaying tapering should be good for equity markets, for Japan it adds pressure on the yen, which is negative for stocks,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd., which has the equivalent of $360 billion in assets.
“It’s been nearly a year since the yen started weakening, but it’s not having as big a positive effect on earnings as I would like, as global fundamentals are still unclear. Still, the news from China today is adding to relief and risk-on sentiment.”
The Topix has slid 0.1 percent this month, trailing all but one of its 23 developed-market peers.
Japanese shares are still the best performers this year among the markets amid optimism Prime Minister Shinzo Abe’s policies and unprecedented monetary easing from the Bank of Japan will lead the country out of deflation.
Futures on the Standard & Poor’s 500 Index dropped 0.1 percent today.
The equity gauge added 0.1 percent yesterday and is poised for the best annual gain since 2003 as weaker-than-forecast economic data bolstered the case for the Fed to maintain the pace of asset purchases.
Factory output rose 0.1 percent in September, slower than the 0.3 percent forecast by economists in a Bloomberg survey.
Another report showed fewer Americans than forecast signed contracts to buy previously owned homes in September, the fourth straight month of declines.
Data last week showed hiring grew at a slower-than-estimated pace.
The Fed is likely to delay lowering its $85 billion in monthly bond purchases until March, according to a Bloomberg News survey of economists conducted October 17-18.
“The view now is the Fed is likely to delay tapering until after March, which will put pressure on the yen and is negative for Japanese stocks,” said Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co., a unit of Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender by market value.
“We’re seeing a lack of appetite for blue-chip stocks.”
Nissan, which gets 34 percent of its sales from the US, slid 0.8 percent to 1,001 yen.
Toyota Motor Corp., the world’s No. 1 carmaker, slipped 0.6 percent to 6,270 yen. Canon Inc., the world’s biggest camera maker, lost 1 percent to 3,120 yen.
In China, the central bank injected funds into the financial system today for the first time in two weeks.
The People’s Bank of China added 13 billion yuan ($2.13 billion) using seven-day reverse-repurchase contracts, according to a trader at a primary dealer required to bid at the auctions.
In Japan, data today showed retail sales climbed 1.8 percent in September from the previous month, more than an estimated 0.5 percent rise and the steepest gain in more than two years.
Separately, the jobless rate dropped to 4.0 percent from 4.1 percent in August.
More than 1,100 companies on the 1,744-member Topix report results in the two weeks through November 7, the peak for earnings season, according to data compiled by Bloomberg.
Of the 152 companies on the gauge that have already posted results this quarter and for which Bloomberg has estimates, 58 percent have recorded sales that topped expectations.
Earnings per share for companies on the measure are expected to increase 55 percent from the previous quarter, according to analyst estimates compiled by Bloomberg.
On the year, profit is set to surge 95 percent, the data show.
Among companies posting results that missed expectations, Komatsu slumped 8.1 percent to 2,168 yen, after forecasting net income at 136 billion yen this fiscal year, down from 184 billion yen projected in July and missing the 177 billion yen estimate of 24 analysts compiled by Bloomberg.
The company said yesterday that demand for mining equipment may fall 50 percent in the 12 months ending March 31.
Hitachi Construction Machinery Co., a competitor of Komatsu, tumbled 5.7 percent to 2,095 yen on reporting a 34 percent drop in first-half profit.
Kawasaki Heavy Industries Ltd. sank 5.8 percent to 391 yen after operating profit trailed analyst estimates, even as it more than doubled.
The maker of ships and railroad cars said first-half operating income climbed to 26.8 billion yen, below the 27.7 billion yen average analyst estimate.
Among shares that gained on earnings, Fujikura surged 13 percent to 438 yen, the most in four years and the biggest gain on the Nikkei 225.
Preliminary first-half profit was 3.47 billion yen, beating its 2 billion yen forecast.
Mitsubishi Motor Corp. jumped 5.5 percent to 1,138 yen for the second-biggest advance on the Nikkei 225.
The automaker posted a 46.7 billion yen profit for the six months through Sept. 30, 55 percent higher than last year.
Keyence Corp., which makes factory automation sensors, jumped 5.2 percent to 37,700 yen after touching its highest on record.
First-half net income was 42.1 billion yen, compared with 32.2 billion yen in the same period a year earlier.
The Topix traded at 1.25 times book value today, compared with 2.56 for the S&P 500 and 1.79 for the Stoxx Europe 600 Index yesterday.
The Japanese gauge’s 30-day historic volatility was at 17 today, compared with its five-year median of 19.21.
Volume on the measure was 10 percent above the 30-day average. - Bloomberg News