November 19, 2008

Japan stocks declined, led by financial companies, on concern the nation's drop into recession will lead to an increase in bad-loan costs. Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. dropped more than 6 percent on reports they'll sell shares to replenish capital sapped by bad loans and share losses. Aiful Corp. led a slump by consumer lenders after Nikko Citigroup Ltd. said interest-refund claims are rising. Mitsubishi Corp. fell to a four-year low on speculation commodity demand in emerging markets will slow. Softbank Corp., a mobile carrier that's lost half its value this year, rose 5.6 percent.
``The economic slowdown is dimming the earnings outlook for banks,'' said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. ``People are avoiding borrowing money from consumer lenders amid uncertainty in the economy. Borrowing money without a repayment plan is like committing suicide.''