Japanese stocks fell, with benchmark indexes slumping by the most this month, as the euro weakened to near a two-week low against the yen on concern Europe’s debt crisis will spread, damping the outlook for export earnings. Nippon Sheet Glass Co., a glassmaker that counts Europe as its biggest market, retreated 2.3 percent and Toyota Motor Corp., the world’s biggest carmaker, lost 1.2 percent. Sony Corp., the maker of Bravia televisions, slumped 1.4 percent after saying it may fall short of a target for TV sales. Uny Co., a retailer, led declines in the Nikkei 225 Stock Average after Macquarie Group Ltd. cut its investment recommendation on the company. “Investors should always think of Europe’s debt problems that are coming out one after another as a risk factor,” said Yutaka Yoshii, a strategist at Tokyo-based Mito Securities Co. “Investors still want to go bargain hunting on exporters and companies with good earnings.” The Nikkei 225 fell 1 percent to 10,204.67 as of 1:40 p.m. in Tokyo. The broader Topix index dropped 0.6 percent to 897.36, with more than three times as many shares declining as advancing. All 33 of the Topix’s industry groups decreased. Both gauges were headed to their biggest drops this month. The Topix retreated 9.6 percent from its high this year on April 15 to the latest close as Europe’s debt crisis, China’s steps to curb property prices and concern about U.S. economic growth damped confidence in a global recovery. Shares in the index were valued at 15.7 times estimated earnings on average on Dec. 17, near a four-month high. Euro Weakens Nippon Sheet Glass sank 2.3 percent to 213 yen. Toyota fell 1.2 percent to 3,215 yen. Canon Inc., the world’s largest camera maker, slid 0.6 percent to 1,166 yen, reversing an advance of 0.2 percent. Fanuc Corp., a maker of industrial robots that earns almost 20 percent of its revenue in Europe, lost 1.4 percent to 12,200 yen, the heaviest drag on the Nikkei 225. “Worries about whether Europe has a system to handle debt crises may affect Japanese stocks through the currency,” said Tomochika Kitaoka, a senior strategist in Tokyo at Mizuho Securities Co. European stocks fell on Dec. 17 on concern that some euro- area nations will be unable to repay their debts, after Moody’s Investors Service cut Ireland’s credit rating by five levels. The euro depreciated to as low as 110.18 against the yen today, its weakest level since Dec. 7. A weaker euro reduces the value of European income at Japanese companies when converted into their home currency. Sony, the world’s third-largest television maker, sank 1.4 percent to 2,922 yen after Vice President Hiroshi Yoshioka said the company may miss a target to sell 25 million TVs this fiscal year. Uny slumped 4.3 percent to 777 yen, the biggest decline in the Nikkei 225, after Macquarie Group cut its rating on the supermarket operator to “underperform” from “neutral.” To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net. To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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