Japanese Stocks Fall as Airlines Decline on Brokerage Downgrade

Japanese stocks fell, with airlines leading declines after a brokerage downgraded its price target on the nation’s two largest carriers. Iron and steel producers rallied amid signs China is stepping up its efforts to support the domestic metals industry.

The Topix index lost 0.4 percent to 1,595.77 at the lunch break in Tokyo, reversing a gain of 0.2 percent and heading for a weekly loss of 0.5 percent in a shortened trading week. Volume was 4 percent lower than the 30-day intraday average. The Nikkei 225 Stock Average slid 0.3 percent to 19,894.88, falling from a three-month high.

ANA Holdings Inc. and Japan Airlines Co. each fell at least 1.7 percent after Mitsubishi UFJ Morgan Stanley Securities Co. said both carriers face a drop in fuel surcharges from Dec. 1 and stiffer competition from Chinese rivals. The broker lowered its price target for both companies, and maintained their neutral rating.

Chinese regulators are considering a request from a metal industry group to curb excessive short selling, according to people with knowledge of the matter. Sumitomo Metal Mining Co. climbed 3.3 percent after copper jumped as much as 4.2 percent, while Kyoei Steel Ltd. rose 1.2 percent.

Source: Bloomberg

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Japanese Stocks Fall After Debt Downgrade as Yen Strengthens

Japanese stocks fell, with the Topix index retreating from a six-year high, as the yen strengthened after Moody’s Investors Service cut the country’s credit rating in the first downgrade of Prime Minister Shinzo Abe’s regime.

The Topix lost 0.5 percent to 1,414.76 as of 9:05 a.m. in Tokyo. All but five of the 33 industry groups slid. The Nikkei 225 Stock Average declined 0.6 percent to 17,488.50. The yen dropped to 119.14 per dollar right after Moody’s announcement yesterday before reversing course and gaining 0.2 percent. It added 0.1 percent to 118.28 today after last month weakening the most since January 2013. West Texas Intermediate crude futures posted the biggest advance in two years yesterday after tumbling 10 percent on Nov. 28.

Moody’s cut the rating one level to A1 after Abe decided to delay a sales-tax increase by 18 months as an initial estimate of gross domestic product showed the economy contracted in the September quarter, sending the country back into recession.

Source: Bloomberg

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