Japanese Stocks Fall as Recession Concerns Mount; Inpex Slumps

March 3 (Bloomberg) -- Japanese shares fell for a second day as concern the deepening recession will spark more losses at financial companies outweighed optimism the government will act to boost equity prices.

Tokio Marine Holdings Inc., the nation’s No. 1 casualty insurer, lost 2.8 percent after American International Group Inc. had the worst quarterly loss in U.S. history, prompting the government to inject more aid. Inpex Corp., Japan’s biggest oil explorer, retreated 5.8 percent as crude prices fell. Seafood maker Maruha Nichiro Holdings Inc. sank 4.3 percent after saying writedowns on its stockholdings will widen its net loss. Fuji Heavy Industries Ltd., maker of Subaru cars, and Isuzu Motors Ltd. reversed losses to advance more than 3.5 percent.

The Nikkei 225 Stock Average fell 50.43, or 0.7 percent, to close at 7,229.72 in Tokyo, after losing as much as 2.6 percent to the lowest closing level since October 1982. The broader Topix index declined 7.79, or 1.1 percent, to 726.80.

“U.S. coffers will be wiped out if the government nationalizes all of its financial institutions,” said Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co. “Investors are wondering which banks will be left to die and are fearful of its consequences.”

Shares pared losses after Japanese Finance Minister Kaoru Yosano said the government can’t ignore “excessive declines” in the nation’s stock market. Yosano said on Feb. 26 that he ordered a study into ways to bolster equities.

The Nikkei has fallen 18 percent in 2009, extending last year’s record 42 percent dive as recessions in the world’s largest economies and global financial turmoil decimated corporate earnings. Japanese banks including Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. have slashed annual profit targets in part because of increasing writedowns on stockholdings.