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Nikkei falls on Dow drop, yen rise

JIJI

Stocks dropped for the third straight session Wednesday amid selling spurred by lower U.S. equities and a rise in the yen.

The Nikkei 225 average closed down 11.76 points at 15,302.65, the day’s high. The Topix fell 4.88 points to end at 1,270.82.

The TSE kicked off the day with losses after overnight drops on Wall Street and in major European stock markets.

After the initial selling ran its course, however, stock prices trimmed losses thanks to buying on dips amid expectations for a rise of Japanese shares ahead, brokers said.

Stocks, however, were later dragged down by position-adjustment selling amid falls in other Asian equities, brokers said.

Still, the Nikkei average’s downside was solid around its 25-day moving average, which stood at 15,198.92 as of Tuesday, brokers said.

The key indexes cut losses again toward the close, helped by purchases of beaten-down shares, they said.

“I felt New York’s drop on Tuesday was strange in that investors moved to adjust positions before seeing major U.S. corporate scorecards. Tokyo investors retreated to the sidelines because they are worried that the New York market will fall again tonight,” said Masashi Oguchi of Mito Securities Co.’s investment information department.

Still, few analysts are concerned about further stock falls in Tokyo as the market has been supported by purchases of pension funds and speculation that the Bank of Japan has bought exchange-traded funds, brokers said.

In the absence of major market-moving incentives, however, investors are keenly awaiting April-June earning reports from Japanese companies, brokers said.

“Market participants have already priced in sluggish earnings affected by the April consumption tax hike to 8 percent. Rather, they will focus on comments by corporate executives on full-year earnings estimates,” Oguchi said.

Falling issues outnumbered rising ones 1,333 to 372 on the first section, while 110 issues were unchanged.

Volume decreased to 2.044 billion shares from Tuesday’s 2.306 billion.

Export-oriented names were battered by the stronger yen. They included automakers Toyota and Mazda as well as electronics makers Sony and Toshiba.

Brokerage firms came under selling pressure on growing concerns over their possible dismal earnings reports for April-June, brokers said. Among them were Nomura, Daiwa and SBI. Other financial-sector issues, including megabank group Sumitomo Mitsui and nonbank lender Aiful, were also downbeat.

On the other hand, tire makers Bridgestone and Sumitomo Rubber were buoyant. Telecommunications carriers SoftBank, KDDI and NTT also gained ground.

Also on the plus side were robot maker Fanuc, construction machinery maker Komatsu and clothing retailer Fast Retailing.