Nikkei falls 1.5 pct; exporters succumb to profit-taking

Tue Jan 15, 2013 8:52pm EST

* Nikkei down 1.5 pct, Topix off 1.0 pct
    * Exporters, securities firms weaken
    * Correction may drag Nikkei under 10,500 points - trader

    By Ayai Tomisawa
    TOKYO, Jan 16 (Reuters) - Japan's Nikkei share average fell
on Wednesday, set to snap a four-day winning streak as investors
took profits on exporters from a pause in the yen's weakness,
while financial stocks also lost ground.
    Exporters led the losses, with Toyota Motor Corp 
falling 1.6 percent, Canon Inc dropping 2.7 percent and
Fanuc Corp shedding 2.7 percent.
    Securities firms, which have been beneficiaries of the
strong market, also weakened. Nomura Holdings skidded
1.2 percent and Daiwa Securities Group slipped 2.1
percent.
    The Nikkei dropped 1.5 percent to 10,720.18.
    Traders said that a pause in the yen's weakness triggered
selling in shares that had gained recently, which could drag the
index below the 10,500-mark in coming days.
    "It's a correction. Some exporters' gains are legitimate,
but others aren't, so I am selling exporters which have gained
while their fundamentals are still poor such as Panasonic," said
Makoto Kikuchi, the chief executive of Myojo Asset Management.
"Investors may not sell sharply before the BOJ meeting, but if
the outcome of the meeting disappoints the market in any way,
the index may be dragged down to near 10,200."
    The Nikkei has rallied about 24 percent over the past two 
months, spurred by weakness in the yen after Japan's new 
leader Shinzo Abe called on the Bank of Japan to adopt 
aggressive policies to energise the ailing economy, including 
setting an annual inflation target of 2 percent.
    The central bank will hold its policy review on Jan. 21-22.
    Hiroichi Nishi, an assistant general manager of equity
research at SMBC Nikko Securities, said yen weakness has already
been priced in as a positive catalyst.
    "Unless the yen weakens further, people may not chase the
market higher aggressively," he said.
    The dollar last traded at 88.33, pulling away from a
2-1/2-year high of 89.67 set on Monday.
    The broader Topix shed 1.0 percent to 896.83.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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