Nikkei falls for 5th day; US fiscal concerns hit exporters

Thu Nov 8, 2012 10:56pm EST

* Nikkei may be volatile next week - analyst
    * Nikkei stays below major support lines
    * Nikkei may hit 8,500 before it picks up - analyst

    By Ayai Tomisawa
    TOKYO, Nov 9 (Reuters) - Japan's Nikkei share average fell
on Friday, extending declines into a fifth day as looming U.S.
fiscal woes and European economic worries have strengthened the
yen and dragged down exporters.
    Key concerns for investors include the U.S. fiscal cliff -
$600 billion in spending cuts and tax increases due to take
effect early next year, as well as few signs of progress in
Europe's debt crisis.
    The prospect of U.S. political wrangling over the fiscal
cliff has deepened uncertainty for investors, who have sold
stocks on expectations that taxes on capital gains and dividends
will go up.
    "This is a major concern for investors and the market may
fall further next week when Congress reconvenes on November 13,"
said Eiji Kinouchi, chief technical analyst at Daiwa Securities.
    Kinouchi said Japan's stock market could face further
pressure and volatility next week as U.S. markets are quite
likely to fall as some companies go ex-dividend, adding that
investors should watch U.S. stocks with high dividend yields
such as power companies. 
    The Nikkei dropped 0.9 percent to 8,759.63 in early
afternoon trade. It is trading below its 25-day moving average
of 8,864.17 and its 13-week moving average at 8,874.71.
   The re-emergence of macro-economic concerns comes amid a
weak quarterly earnings season that has seen many companies cut
their annual guidance.
    "Investors were overly optimistic that they had thought that
the market would price in the U.S. election result and would buy
Japanese stocks whose valuations are cheap," said Masatoshi
Sato, a senior strategist at Mizuho Investors Securities.
    "It's too early to price in all the negative factors. The
market may not pick up unless the index hits bottom around a
psychological support level of 8,500."
    The euro is trading near one-month lows against the yen,
under pressure after ECB President Mario Draghi said the euro
zone economy showed little sign of recovering before the
year-end despite easing financial market conditions.    
    The broader Topix index fell 0.7 percent to 729.91. 
    Carmakers and electronics makers led losses, with Toyota
Motor Corp, Honda Motor Co, Toshiba Corp
 and Nikon Corp declining between 1.0 percent
to 1.8 percent. 
     Nexon Co Ltd slumped 16 percent to 770 yen,
hitting a record low of 766 yen at one point, after the online
game provider cut its full-year operating profit forecast for
the year ending December.
    Tsumura & Co surged 6.7 percent to a 28-month high
after the manufacturer of Chinese medicine raised its full-year
operating profit forecast and annual dividend estimate, citing
better sales.
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