29.07.201306:49:37UTC+00Japan stocks lead the huge decline in Asia

Most Asian stocks slumped Monday, with Japanese equities drifting back as a firm yen further dragged on the nation’s exporters, while Chinese shares missed its stability amid economic worries.

Japan’s Nikkei Stock Average relinquished 2.3% to 13,810.04, declining under the 14,000-point level for the first time since July 4 and looking set for a fourth straight day of losses. The benchmark had pulled back 3% on Friday.

The day’s losses came ahead of a busy week of earnings, with Toyota Motor Corp., Honda Motor Co., Sony Corp. and Softbank Corp. due to announce their quarterly results and update their outlook.

“Net income is expected to surge as much at 75% for multinationals and 33% for domestic-facing firms, ... with Abenomics sending the yen into a 20% deflation spiral over the last 12 months,” said IG Markets strategist Evan Lucas, referring to the economic policies initiated by Japanese Prime Minister Shinzo Abe.

The U.S. dollar has increased nearly 25% versus the yen over the last 12 months, bolstering Japanese exporters’ global competitiveness and repatriated profits. The euro has soared more than 34% versus the Japanese currency over the last year.

On Monday, however, concerns over the U.S. dollar’s current decline versus the yen weighed on shares of companies with a large overseas exposure.

Shares of Toshiba Corp. tumbled 5%, and Japan Tobacco Inc. missed 4.2%, while JFE Holdings Inc. plunged 5.8%, also weighed by a profit outlook that missed expectations.

Renesas Electronics Corp. traded 6.5% lower after the Nikkei newspaper reported on Friday the company had firmed plans to shut down a chip foundry in Japan’s Yamagata prefecture.

On the upside, shares of Fanuc Corp. climbed 3.8% to rank among the few gainers, after the industrial automation firm reported better-than-forecast fiscal first-quarter results.

Shares of Telecommunications firm KDDI Corp. increased 0.8%, after the Nikkei newspaper reported was expected to post a record-high operating profit, helped in part by increased subscriptions for plans related to Apple Inc.’s iPhone.

But Nomura Holdings Inc. slid 3.9% in the downbeat market, even as the broker reported a sharp surge in quarterly profits from the year-ago period. The stock is still up more than 50% so far in 2013.

Meanwhile, official data released before the stock market’s open showed Japan’s retail sales climbed 1.6% in June from the year-ago month, though just short of forecasts.

Elsewhere in the region, the Shanghai Composite fell 1.2%, after also dropping in the previous three days, and Hong Kong’s Hang Seng Index declined 0.5%.

The drop followed data from the National Bureau of Statistics over the weekend, showing that China's industrial profits rose 6.3% in June from the same month a year earlier. The increase compared with a 15.5% rise in profits in May, according to a Bloomberg report.

Crédit Agricole strategist Dariusz Kowalczyk said the slowdown in profits fits the picture of weakening momentum in the economy, but it may also prompt policy action to support the government’s targeted economic growth of 7.5% for 2013.

“The weaker the numbers now, the stronger the government’s response will be to revive growth,” Kowalczyk said.

The drop in Chinese equities also came after Beijing ordered China’s National Audit Office to conduct an urgent review of overall public debt.

Banks and property developers suffered declines, with Bank of Communications Co. or BoCom, missed 1.6%, and China Overseas Land & Investment Ltd. dived down 0.7% in Hong Kong.

In Shanghai, BoCom recorded a 1.3% decrease, and real-estate major Gemdale Corp. downturned 2%.

Meanwhile, South Korea’s Kospi slumped 0.4%, while Australia’s S&P/ASX 200 spiked 0.1% in choppy trade.

In Sydney, shares of Rio Tinto Ltd. climbed 0.2% after the miner said it plans to sell its 80% stake in a copper-and-gold mine in Australia to China Molybdenum Co. for $820 million.

However, shares of Evolution Mining Ltd. dropped 4.2% on the gold producer’s planed write-down on assets following a drop in the metal’s prices.