Japanese Stocks Drop at the End of Fiscal Year

Asian markets ended the first quarter with a whimper Friday, with Japanese stocks taking a tumble on the final trading day of that country’s fiscal year.

Many stock, bond and commodity markets in Asia and elsewhere--including the United States--were closed Friday in advance of Easter Sunday or, in the case of India, for a Hindu celebration.

The end of the Japanese financial year brought a fresh attack of nerves to equities investors worried about massive bad loans held by the country’s banks. Tokyo’s Nikkei-225 index closed down 308.17 points, or 2.7%, at 11,024.94--down 15% for the fiscal year ending March 31.

But the market was up 4.6% for the January-to-March quarter and has had a 17% bounce from an 18-year low in February, leading some to suggest better times ahead.

The March quarter close was key for the Tokyo market as banks now must report much lower market prices for their large stock holdings, rather than book value. But hopes for a Friday rally were dashed by February industrial output data showing weaker-than-expected growth.

Meanwhile, stocks rose modestly in Korea and Malaysia on Friday and dipped in Thailand and Taiwan.

The dollar slipped briefly below 132.40 yen, with some traders saying the escalating Israeli-Palestinian conflict might be hurting the greenback. The yen closed at 132.63 per dollar, up from 132.68 on Thursday.

The best-performing Asian market for the quarter was the tiny Pakistan bourse. The Karachi 100-share index is up 46% this year, fueled by hopes of economic stability after the country signed on as a key ally in the U.S. war on terror.

Other big first-quarter gainers in the region included South Korea, up 29%, and Thailand and Indonesia, both up 23%. On the downside, China’s Shanghai B index shed nearly 12% and Hong Kong’s Hang Seng index slipped 3%.

U.S. indexes were mixed, with the Standard & Poor’s 500 down less than 0.1% for the three-month period while the Dow industrials rose 3.8%.