Barefoot Investor: Japanese Stocks Decline Second Day on Speculation Greece Nearing Default

Japanese stocks fell for a second day, with the Nikkei 225 (NKY) Stock Average headed for its lowest close in almost two and a half years, as exporters and banks tumbled amid speculation Greece may be nearing default.

Sony Corp. (6758), an exporter of consumer electronics that gets 21 percent of its sales in Europe, fell 2.6 percent as the yen’s advance to a 10-year high against the euro dimmed the earnings outlook. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender by market value, declined 2.4 percent on concern Europe’s debt crisis will hurt the global financial system. Sharp Corp. plunged 4.7 percent after Mizuho Securities Co. cut its target price on the maker of flat-screen panels.

The Nikkei 225 fell 1.9 percent to 8,569.66 as of 12:36 p.m. in Tokyo, headed for its lowest close since April 2009. The broader Topix slid 1.8 percent to 741.88 as speculation Germany is preparing for a Greek default spurred turmoil in financial markets worldwide.

“Rising default risks in Greece are stoking concerns about the financial system, which makes you think about the Lehman shock,” said Mitsuo Shimizu, an analyst at Cosmo Securities Co. in Tokyo.

Futures on the Standard & Poor’s 500 Index dropped 0.8 percent today. The index fell 2.7 percent on Sept. 9 in New York after three German officials said Chancellor Angela Merkel’s government is making plans to shore up banks if Greece defaults. The European Central Bank said Juergen Stark resigned from the executive board, suggesting policy makers are divided over how to fight the debt crisis. (Bloomberg)


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