By Akiko Ikeda and Toshiro Hasegawa Nov. 20 (Bloomberg) -- Japan’s Topix index fell for an eighth day, the longest losing streak since July, after Merrill Lynch & Co. cut its outlook on the global semiconductor industry and oil prices retreated. Advantest Corp., the world’s biggest maker of memory-chip testers, lost 2.9 percent, and Nikon Corp., which makes chip equipment and cameras, dropped 4.4 percent. Inpex Corp., Japan’s largest oil explorer, declined 4.5 percent. Sony Corp. slumped 2.4 percent after the electronics maker pushed back key profitability targets by two years. The Nikkei 225 Stock Average lost 1 percent to 9,453.40 at 12:46 p.m. in Tokyo, headed for the lowest close since July 17. The broader Topix index fell 0.5 percent to 833.40, set for the lowest close since April 28, with about three shares declining for every two that advanced. “Bad news is drawing investors’ attention, they’re not looking at the improving fundamentals,” said Masaru Hamasaki, a strategist in Tokyo at Toyota Asset Management Co., which oversees the equivalent of $14 billion. “Investors are waiting for a catalyst to prompt them to buy stocks.” The Organization for Economic Cooperation and Development said in its annual economic report yesterday that Japan will contract 5.3 percent this year, versus a September projection of 5.6 percent. It will expand 1.8 percent next year, the group said, faster than the 0.7 percent it forecast in June. Risks to Growth Risks to the growth outlook include “a rise in long-term interest rates, which are currently very low,” as well as a sharp strengthening of the yen, the report said. “A large and rapid appreciation of the yen could reduce export growth and discourage firms from investing and hiring in Japan.” The yen has traded below 90 against the dollar all this week and has averaged 94.12 this year, according to Bloomberg data. That compares with an average of 103.37 in 2008 and 117.78 in 2007. The stronger yen reduces income when overseas revenue at Japanese companies is converted into their home currency. Advantest lost 2.9 percent to 2,030 yen. Tokyo Electron Co., the world’s second-biggest maker of semiconductor equipment, retreated 1.2 percent to 4,950 yen. Shin-Etsu Chemical Co., the world’s largest maker of silicon wafers, fell 1.1 percent to 4,630 yen, set for the lowest level in four months. Nikon dropped 4.4 percent to 1,566 yen. In New York yesterday, the Standard & Poor’s 500 Index fell 1.3 percent as Intel Corp. and Texas Instruments Inc. declined after Bank of America Corp.’s Merrill Lynch unit cut its ratings on the chipmakers. ‘Rushing to Sell’ “Investors are rushing to sell off stocks,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Since sentiment is bad, any news could drag shares lower.” The Topix has fallen 3.9 percent this week and 3 percent in 2009, this year’s only drop among the world’s 40 largest equity markets, according to data compiled by Bloomberg. That compares with increases of 21 percent for the Standard & Poor’s 500 Index in the U.S. and 24 percent for the Dow Jones Stoxx 600 Index in Europe. The global recession has sapped demand for Japanese companies’ products and the stronger yen has hurt exporters. Oil companies dropped the most among the 33 industry groups in the Topix after crude oil for December delivery retreated for the first time in four days yesterday, plunging 2.7 percent to $77.46 a barrel in New York. The London Metals Index of six primary metals sank 1.5 percent yesterday, the most this month. Oil Companies Fall Inpex declined 4.5 percent to 701,000 yen, a level not seen in three months. Japan Petroleum Exploration Co. decreased 2.7 percent to 3,930 yen. Nippon Oil Corp. lost 2.4 percent to 372 yen, on course for the lowest close since Jan. 26. Nippon Mining Holdings Inc. sank 2 percent to 337 yen. Citigroup Inc. cut its ratings on Cosmo Oil Co., Nippon Oil and Nippon Mining to “hold” from “buy,” citing the risk of lower profit forecasts. Sony retreated 2.4 percent to 2,410 yen. The maker of Bravia televisions said it aims for a 10 percent return on equity by March 2013 from is previous target of March 2011. JTekt Corp., a maker of car parts, fell 3 percent to 907 yen, extending a decline yesterday after a report showed Fidelity cut its stake to 3.9 percent from 5.2 percent. Toyota Motor Corp., which is the world’s biggest carmaker and holds 22 percent of JTekt, decreased 2 percent to 3,420 yen. The yen strengthened from yesterday’s close of stock trading in Tokyo to as much as 88.83 against the dollar today, further weighing on equities. Toyota, which gets almost three- quarters of its sales outside Japan, was the biggest drag on the Topix, followed by Honda Motor Co., which gets 85 percent of revenue abroad. Honda lost 1.8 percent to 2,690 yen. To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

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