GM’s Fate Drags Japan’s Auto Shares Lower

Triggering the auto sell-off was speculation over the weekend that the U.S. Treasury is directing General Motors to file for bankruptcy by June 1.

TOKYO (AP) -- Japanese stocks retreated Tuesday, as automakers skidded amid growing concern about the fate of ailing General Motors Corp.

The benchmark Nikkei 225 stock average lost 81.75 points, or 0.9 percent, to 8,842.68. The broader Topix index fell 0.7 percent to 843.42.

Triggering the auto sell-off was speculation over the weekend that the U.S. Treasury is directing GM to file for bankruptcy by June 1. The goal is to prepare for a fast "surgical" bankruptcy, according to a report Sunday in The New York Times.

The yen's climb against the dollar also weighed on car makers.

Mazda Motor Corp. tumbled 8.7 percent to 243 yen, Nissan Motor Co. closed down 6.3 percent at 491 yen, and Toyota Motor Corp. fell 3.6 percent to 3,800 yen.

Shares of real estate companies also fell after developer Sumitomo Realty & Development Co. shed 5.6 percent to 1,265 yen. The firm said late Monday that its annual profit for the year ended March 31 likely fell 30 percent to 44 billion yen ($440 million).

Goldman Sachs added Sumitomo Realty to its "conviction sell" list Tuesday.

"Sumitomo's stock has risen sharply on expectations for looser credit and government support measures for the industry," real estate analysts Sachiko Okada and Ryo Takanashi of Goldman Sachs said in a research note. "In the current real estate market, however, we think it looks overpriced."

Financial names advanced on the latest signs of a possible recovery in the sector. Goldman Sachs Group Inc. surprised investors Monday when it released better-than-expected quarterly results and announced a $5 billion stock offering.

The company had been scheduled to report early Tuesday, and the bank's $1.7 billion profit helped trigger buying on Wall Street and later in Tokyo.

Nomura Holdings Inc., the country's top securities firm, rose 3.5 percent to 647 yen, and Mitsubishi UFJ Financial Group Inc. added 1.1 percent to 537 yen.

In currencies, the dollar weakened to 99.57 yen from 100.34 yen late Monday. The euro stood at $1.3318 from $1.3376.

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