FOREX TRADE

July 8 (Bloomberg) -- Japanese stocks slumped for a sixth day as the yen strengthened, bank lending slowed and weaker- than-expected machinery orders fanned concern that recent gains have outpaced profit prospects.

Honda Motor Co., which makes almost half its sales in North America, lost 5.5 percent after Japan’s currency climbed to a six-week high versus the dollar. Mitsubishi UFJ Financial Group Inc., the country’s biggest bank by value, slid 3.4 percent as the nation’s bank lending growth slowed for a sixth month. Amada Co., a maker of metalworking equipment, tumbled 4.1 percent, as machinery orders unexpectedly fell 3 percent in May.

“The market is finally returning its focus to the present, rather than looking for an eventual recovery,” said Masaru Hamasaki, a Tokyo-based senior strategist at Toyota Asset Management Co., which oversees $14 billion. “The economic rebound won’t be rapid. It will take time, and share prices are beginning to reflect that.”

The Nikkei 225 Stock Average lost 227.04, or 2.4 percent, to 9,420.75 in Tokyo, the lowest close since May 26. The broader Topix index slumped 2.3 percent, the steepest fall in three weeks, to 888.54.

In New York, the Standard & Poor’s 500 Index dropped 2 percent to the lowest level since May 1, led by energy and technology companies.

The Topix soared as much as 36 percent from a quarter- century low reached in March on rising confidence government stimulus steps would succeed in reviving growth. Worse-than- expected U.S. unemployment data on July 2 fanned concern the recovery won’t materialize and has helped send the gauge lower for six straight days, its longest losing streak since July 2008.

Loans, Machinery Orders

Honda lost 5.5 percent to 2,390 yen after the yen climbed to as much as 94.14 against the dollar, a level not seen since May 22. Toshiba Corp., the world’s second-biggest maker of flash memory chips, lost 3.2 percent to 329 yen. A stronger yen reduces income when overseas revenue is converted into local currency.

Mitsubishi UFJ retreated 3.4 percent to 569 yen. Bank of Yokohama Ltd., one of the country’s biggest regional lenders, slumped 5.3 percent to 503 yen.

Lending at the nation’s non-trust banks rose 2.5 percent in June from the previous year, the Bank of Japan said today, compared with a 3.3 percent increase the previous month. It was the sixth consecutive month of slowing expansion.

Amada tumbled 4.1 percent to 556 yen. Makita Corp., the nation’s largest maker of power tools, fell 3 percent to 2,165 yen. Sojitz Corp., a trading house that derives almost half its profit from machinery dealing, lost 5 percent to 189 yen.

Semiconductor Equipment

Bookings for machinery, an indicator of capital investment intentions, dropped 3 percent in May from the previous month, the Cabinet Office said today. Economists had forecast a 2 percent increase. The data followed reports from the U.S. last week showing the unemployment rate rose to 9.5 percent in June and employers cut more jobs than forecast.

“The June employment data threw some very cold water on the overheated market,” said Yuuki Sakurai, president of Fukoku Capital Management Inc., which oversees about $10 billion in Tokyo. “The Japanese economy is going to revive through the comeback of the world economy, not just China or India, and we know that’s going to take some time.”

Additionally, Credit Suisse Group AG lowered its stance on Japan’s semiconductor production equipment industry to “market weight” from “overweight,” citing a weaker outlook for capital spending.

Aeon, Mixi

Dainippon Screen Manufacturing Co., a chip-equipment maker that was cut to “underperform” by the brokerage, plunged 8.7 percent to 263 yen. Tokyo Electron Ltd., which was also lowered to “underperform,” fell 5.2 percent to 4,340 yen.

Aeon Co. slumped 3.6 percent to 846 yen. Japan’s second- largest retailer posted a 2.49 billion yen ($26.1 million) loss for the latest quarter, its fourth deficit in the last five quarters.

Mixi Inc., operator of Japan’s largest social networking site, soared 17 percent to 687,000 yen, the biggest rally since October, after Morgan Stanley lifted the shares to “overweight” because the company should benefit from growing use of its services on mobile devices.