Japanese stocks fell, dragging the broader Topix Index to a second day of decline, after former Federal Reserve chairman Alan Greenspansaid a default by Greece is “almost certain.”
Canon Inc. (7751), a camera maker that counts Europe as its biggest source of revenue, slid 0.4 percent. Tokyo Electric Power Co., the utility at the center of the worst nuclear crisis in 25 years, slumped 9.1 percent after the head of Japan’s banking lobby said lenders won’t consider forgiving loans made to the company. Sekisui House Ltd. (1928), a home builder, plunged 5.5 percent after announcing a plan to sell convertible bonds.
The Topix index dropped 0.4 percent to 809 at the 11:00 a.m. trading break in Tokyo, erasing gains of as much as 0.3 percent. The Nikkei 225 Stock Average was little changed at 9,410.68, after swinging between gains and losses at least nine times.
“As long as the Greece’s debt crisis isn’t taken care of investors are going to be very cautious,”Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “People are worried Greece’s problems will spread to neighboring countries. If that happens, it will weigh heavily on stocks.”
The Nikkei is heading for a 1.2 percent decline this week, the biggest weekly drop since May 13, amid concern faltering U.S. economic growth and Greece’s worsening sovereign debt crisis will derail the global economic recovery. The Topix index is set for a 1 percent fall.
Greenspan said in an interview yesterday with Charlie Rose in New York that a default by Greece is “almost certain” and that could help drive the U.S. economy into recession. www.bloomberg.com