Japan's Nikkei 225 Futures Drop on Concern About Banks' Losses

By Masaki Kondo and Patrick Rial


Jan. 28 (Bloomberg) -- Japan's Nikkei 225 Stock Average futures fell in Chicago on Jan. 25 after an analyst said Fortis may have further writedowns on subprime-related assets, fueling concern banks will incur more credit-market losses.

U.S.-traded receipts of Mitsubishi UFJ Financial Group Inc., Japan's largest bank by market value, fell 2.7 percent from the closing share price in Tokyo on Jan. 25. Mizuho Financial Group Inc., the third-biggest, dropped 2.2 percent.

U.S. stocks fell for the first time in three days on Jan. 25 after Dresdner Kleinwort said Fortis, Belgium's biggest financial-services company, faces further losses this year on mortgage-backed securities and home-equity loans. Separately, China's economic expansion slowed for a second quarter, the government said last week.

``The Japanese market will be pushed back by the drop in the U.S.,'' Yoshifumi Kikuchi, a market analyst at Yutaka Securities Co., said in an interview with Bloomberg Television. ``Market prices have yet to fully reflect the possibility of a U.S. recession and China's slowdown.''

Nikkei 225 futures expiring in March closed in Chicago at 13,470, down from the close of 13,660 in Osaka and 13,670 in Singapore on Jan. 25. The Bank of New York Co.'s Japan ADR Index, which tracks American depositary receipts of Japanese companies, rose 2 percent the same day.

The Nikkei added 4.1 percent to 13,629.16 on Jan. 25, the biggest percentage advance since March 2002. The broader Topix index jumped 4.7 percent to 1,344.77, ending the week with a 0.2 percent gain.