(Adds stocks, details)
By Elaine Lies
TOKYO, May 21 (Reuters) - Japan's Nikkei stock average slid 2
percent to a one-week low on Wednesday, pressured by selling of
Toyota Motor Co <7203.T> and other exporters as the yen advanced
against the dollar on worries about inflation in the U.S.
economy.
Financials slumped in tandem with their U.S. peers after a
key U.S. analyst said the credit crisis was far from over. That
came a day after Mitsubishi UFJ Financial Group <8306.T> forecast
virtually no growth this year, though it posted a 71 percent rise
in fourth-quarter profit as a turnaround in its consumer credit
unit helped offset subprime losses. []
But energy-linked shares still managed to claw upwards after
oil hit a new peak near $130 a barrel on Tuesday over deepening
supply worries.
"There doesn't seem to be a clear scenario emerging for
recovery," said Takahiko Murai, general manager of equities at
Nozomi Securities.
"The whole issue of credit remains a problem, and even with a
tax cut, U.S. consumption doesn't seem to be expanding. There's a
lot of negativity about this looking ahead."
Two of the biggest U.S. retailers, Target Corp <TGT.N> and
Home Depot Inc <HD.N> announced slack quarterly earnings,
underscoring the problem.
Worries about the U.S. economy have grown after oil prices
jumped and the U.S. Price Producer Index, excluding volatile food
and energy costs, released on Tuesday, rose at the fastest since
1991 for the year to April. []
"There's concern about the unknowns in the U.S. economy,
especially with a number of indicators due out next week," said
Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
By midday, the dollar had slid to around 103.15 yen <JPY=>,
pressuring exporters. A stronger yen makes Japanese goods less
competitive overseas and eats into profits when brought home.
The Nikkei <> shed 279.21 points to 13,880.88, its
lowest since May 14. The broader Topix <> fell 2.47 percent
to 1,365.26.
FINANCIALS FLOUNDER
Japan's top three banks lost a total of 861 billion yen
($8.31 billion) on investments related to subprime U.S. mortgages
in the year to March 2008, with the bulk of that coming from No.2
lender Mizuho Financial Group <8411.T>.
Mitsubishi UFJ Financial, Japan's biggest bank, tumbled 4.8
percent to 1,004 yen, while Mizuho Financial fell 4.1 percent to
519,000 yen and No.3 bank Sumitomo Mitsui Financial Group
<8316.T> dropped 4 percent to 825,000 yen.
Top brokerage Nomura Holdings <8604.T> lost 3.9 percent to
1,725 yen.
Insurers fared even worse, with Sompo Japan Insurance Inc
<8755.T>, the No.2 non-life insurer, falling 6.2 percent to 1,074
yen while the top non-life insurer, Millea Holdings Inc <8766.T>,
slid 4.9 percent.
Toyota fell 3.5 percent to 5,230 yen, while Canon Inc
<7751.T> was down 3.7 percent at 5,450 yen, becoming the biggest
drag on the Nikkei 225 by volume weight. Honda Motor Co <7267.T>
fell 2.9 percent to 3,320 yen.
Not all the news was negative, though.
Oil and gas field developer Inpex Holdings Inc <1605.T>
climbed 2.9 percent to 1.43 million yen, with oil distributor
Showa Shell Sekiyu KK <5002.T> up 1.9 percent to 1,174 yen and
Nippon Oil Corp <5001.T> climbing 1.3 percent to 800 yen.
Trade picked up on the Tokyo exchange's first section, with
1.2 billion shares changing hands, compared with last week's
morning average of 960 million.
Declining stocks beat advancers by more than 6 to 1.
(Editing by Brent Kininmont)
