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OVERSEAS
Japan stocks pause after run

NEW YORK >> Stocks fell overseas yesterday, with Japan's main index retreating from a nine-month high, as weak employment in the United States stirred caution among investors betting on a speedy recovery.

Analysts said many global investors opted to cash in recent gains after the U.S. jobless rate unexpectedly jumped to 6.4 percent last month, the highest level in nine years. Tepid German manufacturing and a profit warning from Dutch retailer Vendex also weighed on shares.

U.S. markets were closed yesterday for the Independence Day holiday and will reopen Monday.

In Japan, the benchmark 225-issue Nikkei Stock Average lost 77.07 points, or 0.8 percent, to 9,547.73. That came after the Nikkei gained 32.56 points, or 0.48 percent, in the previous session to its highest level since Sept. 19, 2002.

Traders said Asian investors took their cue from Wall Street's moderate declines Thursday and drove down shares of automakers such as Honda, Nissan and Toyota. In recent days, stocks had surged on growing hopes for a strong economic recovery in Japan and the United States.

The Tokyo Stock Price Index dropped 3.77 points, or 0.4 percent, to 948.67 points. In the previous session, the TOPIX, which includes more than 1,000 of Japan's largest companies, gained 7.20 points, or 0.76 percent.

Hong Kong's main Hang Seng Index slipped 9.29 points, or 0.09 percent, to 9,636.81. On Thursday, the index had gained 43.48 points, or 0.45 percent. Brokers said the market was hit by selective profit-taking following two sessions of gains.

In Europe, stocks fell after Vendex warned that losses at its V&D department stores will be greater than previously forecast. Germany's economics ministry also said the nation's manufacturing orders declined unexpectedly by 2.2 percent in May, compared to a 1.5 percent rise in April.

Britain's FTSE 100 fell 3.30, or 0.1 percent, to 4,021.50.

France, the CAC 40 Index closed down 19.69, or 0.6 percent, to 3,072.40.

Germany's Xetra DAX fell 2.31, or 0.1 percent, to 3,239.61.

Mazda slows light-truck output

TOKYO >> Mazda Motor Corp., Japan's fifth-largest automaker, said yesterday it would stop making some light trucks and shift the production to Isuzu Motors Ltd. to cut costs and focus on the passenger car market.

The move is part of a broader shakeout in Japan's crowded truck market and comes three months before the Japanese government tightens restrictions on diesel emissions. The new regulations, which will be strengthened again in 2005, will lead to new sales because of increased demand for the cleaner diesel trucks, but they also will require manufacturers to invest more to refit their factories.

Truck sales in Japan have steadily declined over the last decade as companies have cut their capital spending budgets and the government has scaled back public construction projects. This has forced truckmakers to look overseas for profits. But the Asian financial crisis sapped demand that has not entirely returned.

Mazda, which is majority owned by Ford Motor Co., has been gradually getting out of the truck market as a consequence.

By contracting out more of its truck production, Mazda has also thrown a financial lifeline to Isuzu. Though it is the biggest maker of small trucks in Japan, Isuzu has been struggling to lower its debt and rejuvenate its flagging sales. Isuzu has been making some diesel engines for Mazda's trucks since 1994.

Sweden cuts rate to 50-year low

STOCKHOLM, Sweden >> Sweden's central bank unexpectedly cut its benchmark interest rate to the lowest since 1953, the fifth reduction in eight months, citing easing inflation and sputtering growth in the Nordic region's largest economy. The Riksbank, the world's oldest central bank, lowered its repo rate a quarter point to 2.75 percent. Five of 17 economists surveyed by Bloomberg News expected a cut; the rest forecast no change.

"The growth rate is absolutely too low in Sweden," said Jens Spendrup, chief executive officer of Spendrups Bryggeri AB, the nation's biggest brewer. "The cut will benefit my business. With lower interest rates it's easier to realize investments and to borrow money for those investments."

Growth in Sweden, home to Ericsson AB and Volvo AB, has faltered on waning demand for exports, which make up almost half of gross domestic product. The $268 billion economy will expand 1.2 percent this year from 1.9 percent in 2002, the bank said last month. Underlying inflation will be lower than it earlier forecast.