Asian stocks drift as yen grabs focus


The Topix index sank to a 3-year low in Japan, where a worker ogles jellyfish lit in Christmas colors at a Tokyo-area aquarium

By staff and wire reports

HONG KONG, China - Asian stocks drifted on Monday, with Japan's Topix index sinking to a three-year low.

The Japanese yen was the talk of traders on Monday, as it broke through the 128 mark against the dollar for the first time in three years.

Hong Kong's market gave way in afternoon trade, sinking into the red. But its loss was negligible.

Australia also ended narrowly down after posting a gain most of the day.

Taiwan lost its early bank-driven steam to end with a 0.56 percent loss. Stocks also dropped in South Korea.

Markets were closed in Singapore and Malaysia for national holidays. Indonesia and the Philippines were also closed.

Bankruptcies bugging Topix to low

In Tokyo, the benchmark Nikkei index fell 1.79 percent to end at 10,323.35. It is down nearly 7 percent from its post-September 11 high.

But the Topix fell 1.77 percent to 988.98, its worst close since October 1998. It was done in by persistent worries about Japan's banks and the possibility of more corporate failures.

Bankruptcies are running at a rate not seen since 1984, with 1,851 failures in November alone, new figures show.

Mizuho Holdings, the largest bank in the world by assets, fell 8.9 percent to 224,000 yen.

Japan's No. 4 bank, UFJ Holdings, fell 6.5 percent to 259,000 yen.

Nomura Research Institute, the tech- and research wing of brokerage Nomura Holdings, had a successful start to trading.

NRI stock finished at 14,050 yen, up 27.7 percent from its initial public offering price of 11,000 yen. It started the day trading at 14,850 yen.

Nomura Holdings ended the day down 7.2 percent at 1,615 yen.

Shiokawa: let market decide yen rate

But the Japanese currency was the focus of many. The yen was trading at 127.84 in late trade, after rising as high as 128.03, a 38-month weak point.

Japanese officials contributed to the yen's breakout, saying they weren't worried or considering stepping in.

"I believe currencies should be left to market fundamentals," Finance Minister Masajuro Shiokawa told parliament on Monday afternoon, adding that he should avoid expressing support for a weak or strong yen.

The Bank of Japan starts a two-day policy meeting on Tuesday that might see it take steps to bolster Japan's troubled economy.

The weak yen boosted the stocks of some exporters. But the effect was not dramatic, and many lost ground with the general market.

Toyota Motor Corp., Japan's biggest carmaker, fell 1.16 percent to 2,985 yen. It suffered despite a report that it will boost production 2 percent for 2002.

Media stocks down in Sydney

In Australia, the benchmark S&P/ASX 200 index finished down 0.04 percent, essentially flat at 3,289.6.

The market had held up with gains for most of the day. But News Corp., the largest listing, dampened the market with a 0.9 percent drop to A$14.98.

Fellow media company PBL dropped 1.7 percent to A$9.34. Kerry Packer, who turned 64 on Monday, was reportedly back at work after a spell in hospital.

National Australia Bank finally broke its losing streak to end 0.16 percent higher at $30.80.

Takeover target Normandy Mining hit a three-and-a-half year high, up 2.8 percent to A$1.81. It benefited from a gain on Friday in the stock of Newmont, which is trying to buy Normandy.

Other gold stocks continue to get a boost from the merger fever.

New Zealand's NZSE-40 index closed with a 0.31 percent drop, at 2,045.73.

Telecom New Zealand, Wellington's largest listing, dropped 2 percent to NZ$4.98. It accounts for 22 percent of the index.

Brewer Lion Nathan was one of the day's gainers, up 4 cents to NZ$5.60.

Yen weakness hits Korean stocks

South Korea's stocks posted some of the largest declines in Asia. In Seoul, the Kospi ended down 2.54 percent at 648.28.

Korean companies tend to suffer when the yen weakens, finding it harder to compete with cheaper prices for Japanese products.

Electronics and auto stocks - some of Korea's biggest exports - fell. The country's biggest appliance maker, LG Electronics, fell 11.4 percent to 21,800 won.

SK Telecom dropped 4.8 percent to 236,500 won, after it said talks with NTT DoCoMo were likely to collapse.

In Taiwan, the Taiex spent most of the day in the black, only to end down 0.56 percent at 5,456.15.

Banks continued recent strong gains, driven by a rule change that makes mergers more attractive.

Taiwan's top investment bank, China Development Industrial Bank, drove 5.7 percent higher to T$24.00.

Chinatrust Commercial Bank fired ahead the daily 7 percent limit for a one-day move in Taiwan, to T$23.80.

But Taipei's tech stocks were off, with contract chipmaker Taiwan Semiconductor Manufacturing Co. down 3.0 percent at T$81.

Rival United Microelectronics Corp. fell 4.1 percent to T$46.80. Together they account for around 15 percent of the Taiwan market.

Hang Seng ends flat

In Hong Kong, the Hang Seng index finished almost exactly even, down 0.33 points at 11,465.78.

The drop is not significant in percentage terms.

Most property stocks were off again, with Sun Hung Kai Properties down 1.57 percent at HK$62.75.

But Henderson Properties rose 0.92 percent to HK$32.90 after getting strong weekend sales for its Park Central project in the New Territories.

CNOOC, China's third-biggest oil producer behind Petrochina and Sinopec, rose 1.42 percent to HK$7.20, after saying it would increase production in 2002.

Airline Cathay Pacific dropped 2.02 percent to HK$9.70 on persistent worries about its profits for the year.

On the mainland, the Shanghai B shares gained 1.02 percent, while Shenzhen B shares rose 0.48 percent.

Reuters contributed to this report.