Japan's Financial Stocks May Drop on Continued Subprime Concern

By Pavel Alpeyev


Dec. 5 (Bloomberg) -- Japanese financial stocks may fall after JPMorgan Chase & Co. said deteriorating credit markets will reduce profits at the four biggest U.S. securities firms.

Mitsubishi UFJ Financial Group Inc., Japan's largest bank by market value, and Mizuho Financial Group Inc., the second-largest, may lead declines. In the U.S., Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc. dropped, leading the Standard & Poor's 500 Index 0.7 percent lower.

``Falling U.S. stocks, a strong yen and weak dollar, all are likely to contribute to declines,'' said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc.

Nikkei 225 Stock Average futures expiring in December last traded in Chicago at 15,445, up from the close of 15,400 in Osaka and 15,405 in Singapore yesterday. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, fell 0.3 percent.

Yesterday, the Nikkei dropped 1 percent to 15,480.19 and the Topix index declined 1.1 percent to 1,515.50.