Japans Shares Drop on U.s. Housing Concerns With Sony

By: Rain Stockton

With the Nikkei 225 Stock Average falling for a fourth day in June 27, Japanese stocks dropped extending the longest line of declines since early March.

Sony Corp. and Honda Motor Co. led losses on concern demand for their products will come to a halt, is limiting profit and accompanied by signs that the U.S. housing market is worsening.

Mitsubishi Corp. and other commodities-related shares decreased after prices of oil, copper, gold and other raw materials dropped.

Koshi Kumagai, a fund manager at BNP Paribas Asset Management in Tokyo which manages about $438 billion in assets globally, said that the U.S. housing market is worsening. He continued that global investors are now reviewing how much risk they are willing to take which is consequently causing shares to fall.

After the Nikkei newspaper reported that Toshiba Corp. won a power plant construction project worth nearly 600 billion yen ($4.87 billion), the company led gains by nuclear power-related companies. As increasing costs of raw material make the power generation method more appealing, orders for nuclear power plants have been increasing around the world.

As of 10:07 a.m. of June 27 in Tokyo, the Nikkei declined 127.99, or 0.7 percent, to 17,938.12. That represented the fourth day of losses and the longest string of declines since the five days wrapped-up on March 5. The Topix index - a broader one - fell 12.84, or 0.7 percent, to 1753.03.

Sony, the second-biggest consumer electronics maker in the world, dropped yen, or 1.1 percent, to 6,330. Honda Motor Co., Japan's No. 2 automaker by sales and maker of , dropped 80 yen, or 1.8 percent, to 4,320. And the largest, Toyota Motor Corp. lost 90 yen, or 1.2 percent, to 7,590.

The Commerce Department said in June 26 that acquisitions of new homes in the U.S. fell in May; cueing demand is still dithering in the second year of the housing slowdown.

To an annual pace of 915,000 last month, sales dropped 1.6 percent. Economists forecasted slow sales rate of 924,000. April sales figures were revised 5.2 percent lower. Consumer confidence also fell more than expected.

Furthermore, exporters fell as the yen strengthened. For a third day against the dollar, Japan's currency climbed, recently trading at 123.05 yen, after falling to a more than four-year low of 124.14 on June 22. For a third day, the yen also gained against the euro to 165.30, from last week's record low of 166.94.

In other Asian markets open for trade and exchange, Australia's S&P/ASX 200 Index dropped 0.5 percent to 6278.10. South Korea's Kospi index also declined 0.5 percent to 1741.53. Taiwan's Taiex index slid 0.3 percent to 8841.16.

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