Nikkei falls as investors become impatient for ECB measures

* Fuji Media, Dentsu sag after BofA ML downgrades
* Japan Tobacco extends losses on EU probe report
* Topix's trading volume remains low, the 3rd lowest this
year
* Goldman Sachs remains upbeat on the market

By Dominic Lau
TOKYO, Aug 22 (Reuters) - The Nikkei share average fell on
Wednesday after a recent rally, pulled down by investors'
growing impatience with the European Central Bank to act soon to
stem the euro zone's debt crisis. Weak Japanese export data
added to the pessimism.
Having banked on some action by the ECB, investors had
become a bit edgy for signs that the central bank will indeed
agree details for a bond buying programme to bring down the high
borrowing costs for countries like Spain and Italy.
"That's why people are taking profits today," said Kyoya
Okazawa, head of equity and derivatives at BNP Paribas in Tokyo.
The Nikkei dropped 0.3 percent to 9,131.74, taking
the benchmark to below its five-day moving average at 9,143.02
and its 26-week moving average at 9,148.53.
Investors became edgy after the ECB on Monday quashed
speculation about the shape any bond buying programme might
take, saying it was premature as decisions had not been made.
Previously, hopes of firm action by the ECB to ease the euro
zone debt crisis had helped the Nikkei rebound more than 10
p e rcent between July 25, when the index touched a seven-week
low, and a three-month high hit on Aug 20. The Nikkei is up 8
percent so far this year.
Trade figures released on Wednesday cast more gloom over the
outlook, as Japan's exports slumped the most in six months in
July as sales to a debt-ridden Europe and a sluggish China
dropped.
"I don't know whether that data is economically,
fundamentally meaningful but has given people a little bit of
excuse to take money off the table," a senior trader at a
foreign bank said.
But he said most of his business were buy orders, with his
clients interested in trading companies and some financial
names, which he attributed to short covering.
Among banks, Sumitomo Financial Group rose 0.5
percent and Mitsubishi UFJ Financial Group added 0.3
percent.
Fuji Media Holdings shed 3.7 percent and Dentsu Inc
, Japan's largest advertising agency, fell 3.4 percent
after Bank of America Merrill Lynch downgraded its ratings on
the two companies to 'neutral' from 'buy' and lowered their
price targets, citing expectations of slower demand in
advertising from autumn.
A Deutsche Bank downgrade to 'hold' from 'buy' also weighed
on Tokyo Electron Ltd, which lost 2.8 percent.

JAPAN TOBACCO UNDER SPOTLIGHT
Japan Tobacco Inc eased 0.5 percent, extending the
previous session's 1.7 percent drop after the Wall Street
Journal said the European Union is investigating whether a sale
of cigarettes by a Swiss-based unit of Japan Tobacco to a firm
linked to cousins of Syrian president violated its sanctions
against Syria.
The broader Topix index eased 0.3 percent to 762.73.
Trading volume on the index was light, with more than 1.23
billion shares changing hands, the third lowest level this year.
Investors were also cautious ahead of the release of the
minutes of the latest Federal Reserve policy committee meeting
on July 31-Aug. 1.
"People are waiting what comes out of the FOMC (minutes).
There is no reason to do much in the market," another dealer
said, adding that there were a few domestic players selling in
the last few days but in general it was a mixed bag as volume
was light.
Goldman Sachs reiterated its six- and 12-month Topix targets
of 850 and 930 respectively, or 11 and 22 percent upside from
Tuesday's close.
"The combination of dissipating global macro risks and
improving domestic macro and micro fundamentals will help lower
the market's risk premium and drive Topix higher," Goldman Sachs
said in a report.
"Given the sharp rise in just the past four weeks, we expect
the market to digest recent gains near-term," it said, adding
that its three-month target remained 775.
The brokerage said it was overweight on capital goods,
transportation, automobiles, banks and
real estate.