TOKYO: Japanese stocks fell, after the Topix index posted its steepest monthly gain since April 2013, as a China factory gauge signaled a third month of contraction. Iron and steel makers led declines.
Kobe Steel Ltd. tumbled 5.8 percent after cutting sales and profit forecasts. Kirin Holdings Co. headed for the biggest decline since February 2014 as the brewer lowered its full-year operating-profit outlook. Kawasaki Kisen Kaisha Ltd. plunged 8.8 percent after Credit Suisse Group AG cut its rating on the shipper. Murata Manufacturing Co. rose 4.3 percent after Nomura Holdings Inc. raised its price target on the Apple Inc. supplier, citing better-than-expected quarterly earnings.
The Topix retreated 1.9 percent to 1,528.84 as of 12:36 p.m. in Tokyo, after surging 10 percent last month. The Nikkei 225 Stock Average lost 1.8 percent to 18,733.51 on Monday. The yen rose 0.2 percent to 120.33 per dollar after gaining 0.4 percent on Friday as the Bank of Japan refrained from adding to monetary easing. China’s official purchasing managers’ index — the first key economic indicator for this quarter — came in at 49.8 in October, missing economists’ estimates and holding below 50, the line between expansion and contraction.
China’s “various policy measures, which we’ve heard a lot about recently, still weren’t enough to bring the PMI back up to 50, and that suggests the weak trend will continue,” said Tetsuo Seshimo, a portfolio manager at Saison Asset Management Co. in Tokyo. “Although we rallied in October, there wasn’t any change to macro indicators and the gains were mostly driven by easing expectations. If that support begins to falter, stocks will obviously fall.”
