Japan's Nikkei stock average slipped 0.3 percent on Tuesday as the yen climbed against the euro on a report that Russian lenders would try to renegotiate debt and on growing uncertainty over the content of a US bank bailout plan. But Nissan Motor Co surged 7 percent after it announced drastic steps on Monday to cope with the recession, saying it would cut 20,000 jobs as it joined a growing list of automakers warning of red ink this year.
The euro tumbled against the dollar and the yen after the Nikkei business daily said Russian private lenders will ask Moscow to renegotiate with European and other foreign banks to postpone repayment on up to $400 billion of its private-sector debt. Russian Finance Minister Alexei Kudrin later said the Russian government does not plan to consider restructuring the debt of Russian companies or banks.
The Nikkei erased earlier gains amid conflicting reports about the US bank bailout and the fate of a "bad bank" to buy distressed assets from commercial banks, after the announcement of the plan was postponed a day to Tuesday. Japanese investor wariness was compounded by a Japanese market holiday on Wednesday.
The benchmark Nikkei lost 23.09 points to 7,945.94 for its second negative day. The broader Topix fell 0.1 percent to 778.10. The euro initially tumbled against the dollar and the yen on the Russian loan report but it later pared some losses, fetching 117.72 yen and $1.2885. The euro has recently tended to fall on any bad news about Russia.
"There's just no reason to buy," said Tomomi Yamashita, a fund manager at Shinkin Asset Management. "When you think of the exchange rate, full-year earnings are likely to be really hit." Exporters slipped, with Sony Corp falling 0.9 percent to 1,815 yen and Honda Motor Co down 0.4 percent to 2,250 yen. Toyota Motor Corp lost 1.6 percent.
Japan's largest banks gained on short-covering before the US bank announcement, with Mitsubishi UFJ Financial Group rising 1.3 percent to 485 yen and No 3 bank Sumitomo Mitsui Financial Group up 4.4 percent to 3,530 yen. Aozora Bank, a Japanese lender majority-owned by US firm Cerberus Capital Management, warned after the close that its annual net loss would widen to about $2.1 billion, and it replaced its chief executive.
It had finished the day flat after falling nearly 2 percent. Nissan gained 7.3 percent to 280 yen as analysts mostly welcomed the various moves it announced on Monday, including its plan to knock vehicle inventory down by 20 percent by next month and reduce headcount by about 9 percent through the next business year. Trade was light on the Tokyo exchange's first section, with 1.9 billion shares changing hands, compared with last week's daily average of 2.1 billion. Declining stocks outnumbered advancing ones 854 to 727.