Japan stocks fall on banks, but exporters gain
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TOKYO, Dec 17 (Reuters) - Japanese stocks fell for the fourth straight session on Monday, tracking falls on Wall Street after fresh data pointed to a surge in U.S. inflation, dashing hopes for further rate cuts by the Federal Reserve.
Still, the market pared earlier losses as falls in bank shares such as Mitsubishi UFJ Financial Group Inc (8306.T) were offset by solid gains in exporters such as Canon Inc (7751.T) on the relatively firm dollar against the yen.
"Trades on bank shares are trades about the economic outlook," said Tomomi Yamashita, fund manager at Shinkin Asset Management. "The tankan showed deteriorating sentiment. Property shares were also tied to the economic outlook."
The Bank of Japan's quarterly tankan survey on Friday showed business sentiment among big manufacturers sank to a two-year low, hit by rising raw material costs, plummetting construction activity on tighter building rules and fears of a U.S. recession.
Property shares fell after rising briefly in early trade, with Mitsubishi Estate Co Ltd (8802.T) losing 1.4 percent to 2,565 yen.
"There are also earnings by U.S. investment banks, so it's hard to make a move this week," said Takashi Ushio, head of the investment strategy division at Marusan Securities.
Three of Wall Street's biggest investment banks and brokerage firms will report quarterly earnings this week, Goldman Sachs (GS.N) on Tuesday, Morgan Stanley (MS.N) on Wednesday and Bear Stearns BSC.N on Thursday.
All three major U.S. stock indexes tumbled more than 1 percent each on Friday after a report showing a jump in the consumer price index in November.
Tracking falls on Wall Street, Japan's bank shares dropped, with Mitsubishi UFJ down 1.8 percent to 1,055 yen. Mizuho Financial Group Inc (8411.T) slid 2.1 percent to 549,000 yen and Sumitomo Mitsui Financial Group Inc (8316.T) lost 1.3 percent to 846,000 yen.
The market's losses were somewhat softened by exporters as the dollar was traded at 113.18 yen JPY=. Digital camera maker Canon Inc climbed 2 percent to 5,620 yen and TDK Corp (6762.T) added 1.7 percent to 8,510 yen.
Trade was thin, with 748 million shares changing hands, compared with last week's morning average of 1 billion shares. Declining shares beat advancers by nearly three to one.
DRUG DOWN
Shares of Takeda Pharmaceutical Co (4502.T) and other drugmakers fell after the Nikkei business daily said the Japanese government planned to cut drug prices by more than 1 percent in the next fiscal year to shave costs by about 96 billion yen.
Takeda fell 1 percent to 6,660 yen, Astellas Pharma Inc (4503.T) slipped 1.6 percent to 4,900 yen and Eisai Co (4523.T) dropped 2.1 percent to 4,590 yen.
Millea Holdings Inc (8766.T) rose as much as 4.5 percent after Japan's top non-life insurance company said it would buy Lloyd's of London insurer Kiln Ltd KIN.L for 442 million pounds in cash to help it expand overseas. [ID:nT139933] The shares ended the morning session up 1.1 percent at 3,630 yen.
Shares of Towa Real Estate Development Co Ltd 8834.T surged 24 percent to 248 yen after Mitsubishi Estate said on Friday it would raise its stake in Towa Real Estate to a controlling 51.88 percent from 33.4 percent. (Editing by Mike Miller)
