Japanese stocks fell for a second day, led by iron and steel producers, after the Topix index posted its worst monthly loss in three years, as confidence waned that China will be able to prop up its markets amid slowing economic growth.
The Topix slipped 0.6 percent to 1,527.88 as of 9:01 a.m. in Tokyo, after Monday capping its biggest monthly plunge since May 2012. The Nikkei 225 Stock Average fell 0.7 percent to 18,756.04. The yen traded at 121.11 per dollar after strengthening Monday for the first time in five days. The official gauge of China’s manufacturing industry will fall to a three-year low in August, according to the median of economist estimates compiled by Bloomberg before data due Tuesday.
Concern that slowing Chinese growth will hamper global expansion reemerged after Federal Reserve officials signaled they are prepared to raise interest rates as soon as next month.
The rout in global equities last month erased more than $5 trillion from the value of shares as Chinese policy makers tried to bolster their market amid growing concern that its economy may be in worse shape than analysts had estimated. Morgan Stanley reduced its forecast for world growth this year and next on Monday, citing weakening industrial activity in China.