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[TOKYO] Japanese stocks fell for a second day after the Topix index posted its worst monthly loss in three years, as confidence waned that China will be able to prop up its markets amid slowing economic growth. Toshiba Corp tumbled after saying it found new accounting problems.
Nisshin Steel Co slumped 3.3 per cent after Nomura Holdings Inc cut its target price on the steel producer. Topcon Corp plunged 6.1 per cent after Toshiba said it will sell its stake in the medical-equipment maker. Toshiba slid 3.9 per cent after saying it uncovered 10 new cases of accounting irregularities. Pioneer Corp jumped 5.5 per cent after a report the autoparts maker has developed an inexpensive optical system for self- driving cars.
The Topix slipped 1.4 per cent to 1,515.27 as of 9:33 am in Tokyo, after Monday capping its biggest monthly plunge since May 2012. The Nikkei 225 Stock Average fell 1.5 percent to 18,601.78. The yen traded at 120.98 per dollar after strengthening Monday for the first time in five days. The official gauge of China's manufacturing industry will fall to a three-year low in August, according to the median of economist estimates compiled by Bloomberg before data due Tuesday.
"China releases the official Purchasing Managers' Index today and markets may move with it," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co in Tokyo. "We know the Chinese economy is weakening, but we want to see how the deceleration impacts its major trading partners."
The rout in global equities last month erased more than US$5 trillion from the value of shares as Chinese policy makers tried to bolster their market amid growing concern that its economy may be in worse shape than analysts had estimated. Morgan Stanley reduced its forecast for world growth this year and next on Monday, citing weakening industrial activity in China.
China's stocks on Monday capped their biggest two-month slide since 2008 as bearish bets in the options market climbed and Goldman Sachs Group Inc cut its forecast for economic growth. Stocks fell even as China's securities regulator said it will encourage listed companies to conduct mergers and acquisitions, buy back shares when prices are low and pay higher cash dividends.
Bets on a September US interest-rate increase climbed after Federal Reserve Vice Chairman Stanley Fischer said over the weekend there is "good reason" to believe inflation will accelerate and that the Fed should not wait until it hits its inflation goal to act. Investor attention will focus this week on the US August jobs report, due Friday, as the last major data point before the Fed's meeting on Sept 16-17.
Futures on the Standard & Poor's 500 Index fell 1.2 per cent after the underlying measure lost 0.8 per cent on Monday, capping its worst month in more than three years.
Oil fell back Tuesday after surging into a bull market amid the biggest three-day rally since 1990, adding 27 per cent to ease concern about persistently low inflation.