Japanese Stocks Fluctuate; Exporters Retreat on Yen, Machinery Makers Gain

Bloomberg---Japanese stocks fluctuated as the yen strengthened against the dollar, reducing the outlook for overseas earnings, while machinery makers advanced.

Honda Motor Co., which gets more than 40 percent of its revenue from North America, lost 0.8 percent. Fanuc Corp., a maker of industrial robots which earns about 80 percent of its revenue outside Japan, dropped 0.3 percent. NTN Corp., a bearing maker, jumped 3.5 percent after its rating was raised at Credit Suisse AG. Inpex Corp., Japan’s No. 1 oil explorer, rose 1.7 percent after crude prices increased. Prime Minister Naoto Kan’s call for a corporate tax cut helped support the market.

The Nikkei 225 Stock Average fell 0.2 percent to 10,274.53 as of 9:51 a.m. in Tokyo. The broader Topix index was little changed at 897.38 with about eight stocks advancing for every five that declined.

“The yen’s appreciation will weigh on exporters,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. “A tax cut would be positive for Japanese companies and expectations for corporate earnings will increase. This should support the market.”

Japanese Prime Minister Naoto Kan has called for a 5 percentage point cut in the nation’s corporate tax rate, Kyodo News reported, citing government officials it didn’t identify.

The Topix lost 1.1 percent through yesterday in 2010, compared with a gain of 11 percent by the S&P 500 and 9.1 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 15.6 times estimated earnings on average, compared with 14.5 times for the S&P 500 and 12.4 times for the Stoxx 600.

Exporters Decline

Honda, Japan’s second-biggest carmaker by sales, lost 0.8 percent to 3,150 yen. Fanuc retreated 0.3 percent to 12,490 yen. Canon Inc., the world’s largest maker of cameras and which gets about 80 percent of its revenue outside Japan, dropped 0.9 percent to 4,065 yen.

The yen appreciated to 83.11 against the dollar, compared with 84.15 at the close of stock trading in Tokyo yesterday.

Machinery makers extended yesterday’s gain after Credit Suisse raised its rating on NTN Corp., a bearing maker, to “outperform” from “neutral” today. NTN jumped 3.5 percent to 442 yen. SMC Corp., a maker of directional-control devices, advanced 1.6 percent to 14,480 yen. Komatsu Ltd., the world’s second-largest maker of earth movers, rose 1.5 percent to 2,498.

A gauge of machinery makers was the strongest support to the Topix among its 33 industry groups.

Oil Rises

Inpex rose 1.7 percent to 476,000 yen, set for the highest close since July 8. Japan Petroleum Exploration Co., the nation’s second-biggest oil driller, climbed 1.8 percent to 3,105 yen. The index group that includes those companies had the largest increase in Topix.

Crude oil for January delivery increased 0.9 percent to settle at $88.61 a barrel in New York yesterday. Copper futures rose to a record of $9,235.25 in London. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum increased 2.2 percent yesterday.

Olympus Corp., an optical-equipment maker, climbed 2.8 percent to 2,536 yen, the third-largest gain in the Nikkei 225. The company had its rating increased to “buy” from “hold” at Deutsche Bank AG.