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The Nikkei Falls 3.5% on Exporter Earnings Guidance and a Stronger Yen

“Japanese shares fell, with the Topix index (TPX) deepening its correction, as Nomura Holdings Inc. paced declines among brokerages and a stronger yen weighed on exporters’ earnings outlook.

The Topix lost 3.4 percent to 1,096.95 at the close of trading in Tokyo, with all of its 33 industry groups falling. The gauge is down 14 percent from its recent high on May 22. The index sank 2.5 percent in May, its first monthly drop since August. Measures of real estate companies and brokerages, the two Topix industry groups that led the rally from November, have fallen more than 25 percent from recent highs.

Japan is somewhat of an overcrowded trade since a lot of investors have been buying in,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., which manages about $51 billion. “Hedge funds probably needed to lock in profits. We’re still overweight on Japanese equities.”

Nomura tumbled 8.4 percent as brokerages dropped the most on the Topix. SoftBank Corp. slid 4.8 percent after a shareholder advisory firm opposed the carrier’s takeover of Sprint Nextel Corp. Toyota Motor Corp., the world’s largest carmaker, lost 3.3 percent as the yen traded near its highest level since May 9. Mitsubishi Estate Co., the country’s biggest developer, slid 7.5 percent to pace a decline among property stocks….”

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