Japanese Stocks Drop Most in Six Weeks

Japanese stocks fell the most in six weeks as rising commodities prices sparked concern inflation will erode corporate profits, while the worsening U.S. housing market dimmed prospects for a recovery in the world's biggest economy.
TradingEconomics.com, Bloomberg 5/26/2008 8:10:50 AM

Bridgestone Corp. led tiremakers lower after rubber futures rose to the highest in 28 years. Daihatsu Motor Co. sank the most in nine months after Daiwa Securities Group Inc. said materials costs will cut profit. Nissan Motor Co. slumped after Merrill Lynch & Co. downgraded the shares, and the supply of unsold properties in the U.S. jumped to a record.

The Nikkei 225 Stock Average lost 322.01, or 2.3 percent, to 13,690.19 at the close of trading in Tokyo. The broader Topix index dropped 32.51, or 2.4 percent, to 1,344.18. Both gauges fell by the most since April 14, and all 33 industry groups in the Topix fell.

Tiremakers slumped after oil, a raw material for tires, rose a second day on supply concerns and rubber futures surged to the highest since April 1980 amid declining stockpiles in China. Bridgestone, the world's second-largest tiremaker, tumbled 5.6 percent to 1,736 yen. Sumitomo Rubber Industries Co., Japan's second biggest, fell 5.1 percent to 842 yen.

The yen climbed to as high as 103.06 versus the U.S. currency, from 104.06 at the close of trading in Tokyo last week. A stronger yen decreases the value of Japanese exporters' dollar- denominated sales when converted into the local currency.

Japanese Stocks Drop Most in Six Weeks