Monday October 5, 2009

Japan stocks fall to 11-week low Monday

TOKYO: Japanese stocks fell to an 11-week low Monday, pressured by a strong yen and fresh worries over a slow global economic recovery following a worse-than-expected U.S. job report.

The benchmark Nikkei 225 stock average lost 57.38 points, or 0.6 percent, to 9,674.49, down for a third straight trading day.

It marked the lowest close since July 21 when the key stock index finished at 9,652.02.

The broader Topix index declined 0.8 percent to 867.28.

"Investors were disappointed by the worse-than-expected U.S. report. It was yet another somber indicator that a U.S. economic recovery is very fragile," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

The Labor Department said Friday U.S. employers cut 263,000 jobs in September, which was more than the 201,000 cut in August and worse than expected.

The U.S. jobless rate notched up from 9.7 percent to a new 26-year high of 9.8 percent.

Apart from worries over a slow U.S. economic recovery, sentiment remained downbeat due to a strong yen, which pressures Japanese exporters by cutting their overseas profits.

"Investors were jittery that if the yen remained at this level, it could surely pressure exporters' profits in the latter half of this year," Sato.

Among blue chips, Toyota Motor Corp., the world's biggest automaker, fell 0.9 percent to 3,350 yen. Honda Motor Co. lost 2.8 percent to 2,595 yen.

Nissan Motor Co. edged down 0.2 percent to 591 yen.

Sony Corp. was down 2.0 percent at 2,400 yen, while Panasonic Corp. dropped 2.2 percent to 1,221 yen.

In currencies, the dollar was trading at 89.79 yen in Tokyo Monday afternoon from 89.40 yen in New York late Friday. The euro rose to $1.4630 from $1.4590.

Other Asian stock markets also fell fell Monday (0500gmt).

Most of the region's markets suffered modest losses, while the dollar ticked up against the yen and crude oil prices lingered below $70 a barrel.

Investors held back after a U.S. government report Friday showed that employers cut 263,000 jobs last month, far worse than the 201,000 economists expected.

The unemployment rate increased to 9.8 percent.

The news was unsettling because it suggested companies were still relying on cost-cutting to eke out profits and consumers were still hurting and unlikely to boost their spending anytime soon.

It also inspired extra caution ahead of third-quarter earnings reports this week that could shed more light on the U.S. economy's health.

Hong Kong's Hang Seng slipped 35.41, or 0.2 percent, to 20,340.08.

In South Korea, the Kospi dropped nearly 2 percent to 1,612.13.

India's benchmark fell 0.8 percent,

Australia's index was down 0.3 percent.

Singapore's benchmark fell 1 percent.

U.S. futures hinted Wall Street was in store for more losses. - AP

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