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Nikkei topples from 4-mth high, slowdown worries outweigh BOJ action
* Effect of BOJ easing seen as short-lived * Worries about China slowdown persist * JAL extends gains after public re-listing * NTT climbs on share buyback By Sophie Knight TOKYO, Sept 20 (Reuters) - Japan's Nikkei share average dropped in early trade on Thursday, pulling back from a four-month closing high hit the previous day when the Bank of Japan eased monetary policy and amid caution ahead of data from China later in the session. Riskier assets boosted by the BOJ's decision on Wednesday fell as concerns about a persistently strong yen and flagging global growth returned to the fore and investors sought safety in defensives such as communications and pharmaceutical firms. The BOJ said on Wednesday it would expand its asset buying and loan programme by 10 trillion yen ($127.21 billion) to 80 trillion yen to bolster Japan's export-driven economy as it struggles with flagging global demand. "I don't think there's going to be as big an effect on stocks this time as their "Valentine easing"," said Yoshihiko Tabei, chief analyst at Kazaka Securities, referring to the BOJ's unexpected easing of monetary policy on February 14. "The yen is a lot stronger now and the outlook for the global economy is bleaker. They also didn't mention deflation." The Nikkei dropped 0.6 percent to 9,189.67 after hitting a four-month closing high of 9,232.21 on Wednesday after the BOJ's announcement. The mining sector, seen as particularly sensitive to economic trends, lost 1.8 percent, while retailers, , which are largely shielded from the downside of a strong yen, gained 0.6 percent. Adding to the gloom, Japanese manufacturers' sentiment hit its lowest since February, a Reuters poll showed, while August exports fell 5.8 percent from a year earlier, down for a third straight month as a slowdown in China and Europe crimp demand. Investors are awaiting the HSBC Purchasing Managers' Index for China due later on Thursday, which could add to concerns about shrinking revenue from China for Japanese firms after several closed factories and stores in the country this week due to protests sparked by a territorial dispute. "There are few positive incentives to push the market up today, but just how weak it gets will be determined by how bad the China (purchasing managers' index) is," said Toshiyuki Kanayama, a senior market analyst at Monex. Komatsu Ltd, a construction machinery maker with high exposure to China, fell 0.8 percent, while industrials robotics maker Fanuc Ltd lost 0.9 percent on concerns over its dependence on the Chinese market. Gainers included Nippon Telegraph and Telephone Corp (NTT) , which climbed 5.8 percent after the company said it plans to buy back up to 150 billion yen ($1.9 billion) worth of its own shares, or 3.4 percent of all shares issued, excluding treasury stocks. Nidec Corp also ran against the market, putting on 1 percent after the Nikkei daily said it would buy U.S. motor makers Kinetek and Avtron Industrial for about $500 million in cash and bank loans. Japan Airlines Co Ltd extended gains after Wednesday's public re-listing, rising 0.7 percent as the price for crude slumped to a one-month low of $91.25 on the back of Saudi efforts to tame prices and a massive rise in U.S. crude inventories. Japan Airlines was the most-traded stock on the main board by turnover, while rival All Nippon Airways Co Ltd slipped 0.6 percent after Nomura Securities cut its price target on the carrier to 190 yen from 260 after its new share issue in July. The broader Topix index dropped 0.3 percent to 762.54.
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