Japan stocks fall amid yen, Europe debt concerns

posted: 1 DAY 23 HOURS AGO

Text SizeAAA

TOKYO -Japanese stocks extended losses Monday, as a stronger yen and European debt jitters sent the benchmark Nikkei 225 index to a two-month low.

The benchmark Nikkei 225 stock average lost 105.27 points, or 1.1 percent, to 9,951.82 — its first finish under the key 10,000 line since Dec. 10. The broader Topix index shed 1 percent to 883.01.

Worries about unsustainable government debt in several European countries has rattled global financial markets since early this year. Those concerns intensified last week, undermining the euro, after Portugal's lawmakers defeated the government over its deficit reduction plan.

The yen's advance against the euro as well as the dollar weighed on overall market sentiment and hurt exporters, whose overseas earnings decline in value as the yen strengthens.

Sony Corp. shed 3.6 percent to 2,973 yen, while Panasonic Corp. plunged 5.3 percent to 1,318 yen. On Friday, Panasonic reported that it had booked its second quarterly profit in the October-December period. But it continued to forecast a net loss of 140 billion yen ($1.6 billion) for the year and lagged rivals in turning around its television operations.

Shares of Toyota Motor Corp. fell 1.1 percent to 3,280 yen amid speculation the world's largest automaker would add the Prius hybrid to its recall list. The decline also reflects disappointment in President Akio Toyoda's performance Friday at his first press conference since the company's Jan. 21 recall to fix sticky accelerators.

Toyoda said he will set up a special task force on quality and seek outside experts for advice.

"This begs the question, has Toyota abdicated quality leadership if it has to resort to outside advisers on its core manufacturing business?" asked Kurt Sanger, an auto analyst with Deutsche Securities in Tokyo. "With the market worried about brand value more than direct cost, this is not reassuring."

In currencies, the dollar slipped to 89.30 yen from 89.50 yen late Friday. The euro weakened to $1.3628 from $1.3664.

2010-02-08 03:33:17