April 11 (Bloomberg) -- Japanese stocks fell a seventh day after Spanish bond yields surged to levels that prompted other euro members to seek bailouts, raising concern the debt crisis is spreading. Sony (6758) Corp. plunged after posting a record loss.
Mazda Motor Corp. (7261), an automaker that gets almost a fifth of its sales in Europe, dropped 2.2 percent. Sony plunged 4.4 percent after its loss was double forecasts on a writedown of deferred tax assets. Inpex Corp. (1662), the nation’s leading energy explorer, dropped 1 percent after crude prices fell.
The Nikkei 225 Stock Average (NKY) fell 1.2 percent to 9,422.74 as of 10:18 a.m. in Tokyo in the longest run of losses since July 2009 with all but eight stocks falling. The broader Topix Index dropped 1.3 percent to 802.60. Shares extended losses from yesterday, when the Bank ofJapan refrained from adding more stimulus, driving the yen higher.
“Tougher austerity measures are taking a toll on the Spanish economy,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “We don’t see risk aversion coming to a halt, and circumstances are getting chaotic. The markets are calling for policy action.”
The Topix gained about 10 percent this year on optimism the Bank of Japan will introduce more measures to spur growth after boosting its asset-purchase program in February and that reconstruction after last year’s disasters will escalate.
Spanish Yields Surge
Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.3 percent today. The index fell 1.7 percent in New York yesterday as Spanish bonds slumped after Economy Minister Luis de Guindos declined to rule out a rescue. The Bank of Spain said the nation’s lenders may need extra capital if the economy weakens more than expected. Spanish bond yields rose closer to levels that prompted Greece, Ireland and Portugal to seek bailouts.
Exporters fell as the yen rose against all of its 16 major counterparts yesterday, damping the earnings outlook for Japanese exporters. The yen touched 80.62 per dollar today, the highest since March 7, while reaching 105.45 per euro, the strongest since Feb. 22.
“Spain is in a very difficult situation and more likely than not to require some type of official intervention at some point,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “Europe is still 20 percent of the world economy and obviously a big customer of Asia.”
Shares on the Topix are valued at 0.98 times book value, compared with 1.36 times for the MSCI Asia Pacific Index, 2.21 times for the S&P 500 and 1.39 times for the Stoxx Europe 600 Index. A number below one means that investors can buy companies for less than the value of their assets.
A volatility measure for Japanese stocks rose as a report showed today Japan’s machinery orders unexpectedly rose in February. The Nikkei 225 Volatility Index (VNKY) rose 4.1 percent to 20.68, indicating traders expect a swing of about 6 percent on the benchmark gauge over the next 30 days. Trading volume on the gauge was 22 percent below the 30-day average.
Energy shares fell after Brent oil for May settlement dropped $2.79, or 2.3 percent, to end the session at $119.88 a barrel on the London-based ICE Futures Europe exchange.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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