By Brad Frischkorn
TOKYO (MarketWatch) --Tokyo stocks ended sharply down Monday, the first trading day of fiscal 2013, as a disappointing business sentiment survey and a rise in the yen triggered broad selling targeting both domestic and exporter shares.
The Nikkei Stock Average tumbled 262.89 points, or 2.1%, to 12,135.02 following the prior session’s 0.5% rise. On a percentage basis, it was the sharpest loss for the benchmark since March 22, and its first April 1 decline since 1995.
The Topix index of all the Tokyo Stock Exchange First Section issues also fell 34.14 points, or 3.3%, to 1,000.57, with all 33 subindexes ending deep in negative territory.
Participation levels were robust, but not excessively high considering the size of the fall, with 2.85 billion shares worth just over 2.0 trillion yen changing hands.
The major indexes opened in negative territory, hurt by a disappointing Bank of Japan tankan survey of business sentiment, which showed a smaller-than-expected lessening of pessimism among large Japanese companies in the last quarter.
The dollar also slipped against the yen, falling under ¥93, exacerbating the sell pressure as the day wore on.
“The tankan reaction may have resulted from the perception that with the Nikkei having gained 19% from end-December to end-March, general business sentiment should have been at least a little better,” said Tachibana Securities market analyst Kenichi Hirano.
“Along with the Easter holiday-driven absence of many foreign players, those remaining were happy enough to simply take profits,” added a director of equity trading at a foreign brokerage, noting that the week is heavy with potential news and event drivers, including the BOJ’s anxiously awaited policy announcement expected Thursday and Friday’s U.S. jobs data report.
Across-the-board selling took a toll on heavily weighted shares that had benefited from the recent market rise. Softbank Corp. /zigman2/quotes/207303954/delayed JP:9984 -0.94% lost 2.0% to ¥4,255, Shin-Etsu Chemical Co. /zigman2/quotes/205244905/delayed JP:4063 -1.37% dropped 4.2% to ¥5,990, Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +1.02% fell 4.3% to ¥1,572, and Takeda Pharmaceutical Co. Ltd. /zigman2/quotes/201302442/delayed JP:4502 -0.67% tumbled 5.0% to ¥4,780.
Among major auto makers, Honda Motor Co. Ltd. /zigman2/quotes/200490352/delayed JP:7267 -0.58% dropped 2.7% to ¥3,460, while Daiwa Securities Group Inc. /zigman2/quotes/201391978/delayed JP:8601 -0.82% led financial shares lower, with a 5.6% loss to ¥619. Marine shipper Kawasaki Kisen Kaisha Ltd. /zigman2/quotes/201857679/delayed JP:9107 -1.46% tumbled 5.0% to ¥189.
Railroad shares, normally defensive in nature, ranked among the worst performers on the board, with Central Japan Railway Co. /zigman2/quotes/205638698/delayed JP:9022 +2.53% closing down 5.1% at ¥9,410 after President Yoshiomi Yamada said at a news conference Friday that the government may introduce restrictions on foreign investment in the industry, as it did for airlines.
East Japan Railway Co. /zigman2/quotes/201416061/delayed JP:9020 +1.52% slid 5.8% to ¥7,270, while West Japan Railway Co. /zigman2/quotes/208344126/delayed JP:9021 +2.09% surrendered 7.2% to ¥4,190. Analysts said the sector reaction may have illustrated a knee-jerk reaction to the comments, exacerbated by the poor overall market performance.
“With foreigners responsible for over half of the daily trading in Japanese stocks, however, I think the likelihood of expanded restrictions on select shares is probably not very realistic,” said an officer at a domestic asset manager.
Markets in Australia, New Zealand and Hong Kong were closed Monday for the Easter holiday.