Japan PM gets his timing wrong

TIMING is everything, and Japanese Prime Minister Junichiro Koizumo must be wishing he had appeared before the parliamentary budget committee earlier in the week, rather than this morning.

He poured cold water on demands from within his ruling Liberal Democratic Party that he increase public spending further to boost the economy. 'Stocks have risen despite cuts in public works spending,' he said.

But, as he spoke, Tokyo stocks were falling, retreating further from the important 10,000-point level the Nikkei has tested twice this week. It was not local economic matters that weighed down the market, but a delayed reaction to Yahoo!'s disappointing results from the day before.

That caused a general retreat from technology stocks, and the Nikkei fell 320.27 points to 9635.35.

Today it was Softbank Investment's turn to fall. It was down 9.86% at 192,000 yen. In the previous session its parent, Softbank, had fallen 10.47% after an 11-day winning streak. It retreated a further 10.77% today to 2900 yen.

Toshiba was 5.8% lower at 471 yen, Hitachi fell 4.71% to 567 and chip equipment maker Tokyo Electron was down 3.94% at 6590.

Defensive stocks were the beneficiaries. Tokyo Electric Power (Tepco), Japan's top power utility, was up 1.11% at 2285 yen. Investors were encouraged by news that the governor of the northern Honshu city of Fukushima had given the go-ahead to restart a reactor at the Daiichi plant there.

The country's second-largest power utility, Kansai Electric Power, was also up 1.35% at 1875 yen.

Hong Kong stocks followed Tokyo down, the Hang Seng losing its grip on 10,000 after a three-session rally. The index fell 81.27 points, or 0.81%, to 9902.04. While profit-taking accounted for some of the decline, there was also selling of China issues, which had been overbought in recent days. China Southern Airlines was among the biggest losers, falling 3.26% to HK$2.22.

Exporter Li & Fung fell for a second day. It shares were off 1.37% to HK$10.80. Drug manufacturer Dawnrays Pharmaceutical of China, making its market debut, edged to HK$0.81 from its issue price of HK$0.80.

In Sydney, furniture and electricals retailer Harvey Norman rose in a falling market after delivering a promised 14.4% rise in full-year sales to A$3.2 billion (£1.3 billion).

Its shares rose 2.86% to A$2.52, compared with a 12-month high of A$3.30 nearly a year ago and a four-year low of A$1.88 in March. The All Ordinaries lost just 0.1 of a point at 3022.8. There would have been severe falls had it not been for acquisition activity among listed property trusts, with the sub-sector index up 0.7%.

Resources stocks BHP Billiton and Rio Tinto both gave up some recent gains. BHP fell 0.88% to A$9.03, while Rio was down 0.92% at A$30.05.

Singapore was also weaker as tech stocks followed Tokyo lower. Chartered Semiconductor was typical of the sector, falling 1.82% to S$1.08.

There were some winners, Dayen Environmental gaining 8.18% to S$0.60 on news of a water treatment deal in China, but the Straits Times index fell 0.33% or 4.96 points to 1514.8.