Japan Stocks Drop As Economy Falls Into Recession
Japan's stock market lurched to the downside Monday morning, as investors reacted to a surprise economic contaction in the July-September period on both a quarterly and annualized basis. The Nikkei Stock Average lost 0.9%, with the Topix off 0.7%, as a 1.6% annualized drop in GDP (against a Wall Street Journal survey consensus for a 2.25% gain) marked the second contraction in a row, putting Japan in a technical recession. Real-estate and construction shares were notably weaker, as Mitsubishi Estate Co. fell 1.3%, Sumitomo Realty & Development Co. and Kajima Corp. lost 1.5% apiece, and Sekisui House Ltd. and Obayashi Corp. retreated 1.2% each. The Japanese yen fell sharply immediately after the data release, with the dollar rising to just below the �117 level before retreating back to �116.43. Still, the Japanese currency was weak enough to limit losses for some of the blue-chip exporters, as Sony Corp. slipped 0.4%, Sharp Corp. eased 0.3%, Mazda Motor Corp. added 0.2%, and Fujitsu Ltd. was flat. Bucking the trend, Mitsubishi UFJ Financial Group Inc. rallied 3.5% on the strength of its earnings report, released Friday, showing a 9% gain in April-September net profit. Fellow megabank Sumitomo Mitsui Financial Group Inc. added 0.5% following its own results, but Mizuho Financial Group Inc. lost 1.1%.
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