ASIA STOCKS closed down, led by Japan

Japanese stocks ended at their lowest level in more than a month Monday as a strengthened yen weighed down exporters, while economic worries hurt mainland Chinese shares.

 

The Nikkei Stock Average ended 3.3% lower for its lowest finish since June 27, while the Shanghai Composite fell 1.7%. Both benchmarks had also dropped in the previous three sessions.

 

The losses in Tokyo came ahead of a busy week of earnings, with Toyota Motor Corp., Honda Motor Co., Sony Corp. and Softbank Corp. due to announce their quarterly results and update their outlook.

 

On Monday, concerns over the U.S. dollar’s recent fall against the yen weighed on shares of companies with a large overseas exposure as the greenback slid under the ¥98-level. The yen rallied after BoJ Kuroda hinted that while fiscal consolidation is necessary, Japan's economy faces its biggest risk from outside the country, saying they are closely monitoring the situation in China to see if they achieve a 'soft landing. Kuroda also said the CPI growth rate, capex will gradually accelerate. On the sales tax, Kuroda said don't think raising the tax in two steps will hurt economic growth.

 

Meanwhile, official data released before the stock market’s open showed Japan’s retail sales climbed 1.6% in June from the year-ago month, though just short of forecasts.

 

Shares of Toshiba Corp. gave up 5% and Japan Tobacco Inc. lost 4.9%, while JFE Holdings Inc. slumped 6%, also weighed by a profit outlook that missed expectations.

 

Nomura Holdings Inc. slid 5.7% in the downbeat market, even as the broker reported a sharp surge in quarterly profits from the year-ago period. The stock is still up more than 50% so far in 2013.

 

Shares of Fanuc Corp. rose 2.1% after the industrial automation firm reported better-than-forecast fiscal first-quarter results.

 

Elsewhere in the region, South Korea’s Kospi ended 0.6% lower, while Australia’s S&P/ASX 200 ended 0.1% higher after a choppy trading session. Hong Kong’s Hang Seng Index declined 0.5%.

 

The drop in Shanghai and Hong Kong followed data from the National Bureau of Statistics over the weekend, showing that Chinese industrial profits rose 6.3% in June from the same month a year earlier. The increase marked a sharp slowdown from a 15.5% rise in profits in May.

 

The drop in Chinese equities also came after Beijing ordered China’s National Audit Office to conduct an urgent review of overall public debt.

 

Banks and property developers suffered declines, with Bank of Communications Co.  or BoCom, losing 1.8%, and China Resources Land Ltd. shed 2.9% in Hong Kong.

 

In Shanghai, BoCom fell 1.9%, and real-estate major Gemdale Corp. stumbled 4.2%.

 

 

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