Japan Stocks Fall as Investors Weigh Greek Deadline, China Rout

Japanese stocks fell as investors weigh China’s broadening equity rout and an ultimatum from European leaders that they will force Greece out of the currency union if a Sunday deadline isn’t met.The Topix index lost 0.4 percent to 1,631.12 as of 9:01 a.m. in Tokyo, with all but seven of its 33 industry groups declining. The Nikkei 225 Stock Average dropped 0.4 percent to 20,287.11.“I think the pricing-in of the Greek debt problem is continuing, but we still have a lot of uncertainty,” Hiroichi Nishi, a manager at SMBC Nikko Securities Inc. said by phone from Tokyo. “Continuing declines in Chinese stocks, or fears that the Chinese economy will keep slowing down, will weigh on the market.”China is suffering its biggest stock rout since 1992 as leveraged investors exit the market despite government measures aimed at stemming losses. Greece has five days to submit a new set of reform proposals needed to earn more bailout aid and bring its economy back from the brink. European Commission President Jean-Claude Juncker said a scenario for Greece exiting the euro has been prepared.“We have only a few days left to find a solution,” German Chancellor Angela Merkel told reporters late Tuesday after euro-area leaders met in Brussels. She conceded that she is “not especially optimistic.”Sunday now looms as the climax of a five-year battle to contain Greece’s debts, potentially splintering a currency that was meant to be irreversible and throwing more than a half-century of economic and political integration into reverse.A flurry of measures to stabilize the Chinese market, including a pledge by state-run financial firms to buy 120 billion yuan ($19 billion) worth of shares and a halt to initial public offerings, are failing to stop a retreat that erased more than $3.2 trillion of value in less than a month.The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong entered a bear market Tuesday, having fallen about 20 percent from a May high. Futures on the gauge slumped 3.9 percent in most recent trading.E-mini futures on the Standard & Poor’s 500 Index fell 0.2 percent after the underlying measure rose 0.6 percent on Tuesday. The Stoxx Europe 600 Index fell 1.6 percent.Japan posted a current account surplus of 1.9 trillion yen in May, wider than the 1.57 trillion yen forecast by economists, data released Wednesday in Tokyo show.