Nikkei falls, may snap 12-week winning streak on euro zone worry

Thu Feb 7, 2013 10:08pm EST

* Sony dives 9 pct
    * Fujitsu rises on chip unit restructure
    * Nikkei may snap 12-week winning streak
    * Nikkei in short-term correction  - analyst

    By Ayai Tomisawa
    TOKYO, Feb 8 (Reuters) - Japan's Nikkei share average fell
for a second day on Friday as investor sentiment was dented by
gloomy comments from the ECB president on Europe's outlook,
while Sony Corp tumbled on worse-than-expected
quarterly results.
    The Nikkei average fell 1.4 percent to 11,200.44 by
the midday break, retreating from a 33-month high of 11,498.42
struck on Wednesday.
    Hit by a sell-off for two straight days, the Nikkei is only
up 0.1 percent this week so far, which suggests it may snap  12
straight week of gains, its longest winning streak in 54 years.
    Among Friday's losers, Sony Corp led the falls and
was the most-traded stock on the board by turnover, tumbling 9
percent after profits in the October-December quarter missed
market expectations. 
    Sony's share price rocketed 42.1 percent in January,
catching up with sharp gains in the Nikkei after a lag through
November and December.
    "The company's stock has been bought because of a weakening
yen, but unless it can show that its top line is also growing,
it does not look very attractive," said Hajime Nakajima, a
deputy general manager at Iwai Cosmo Securities.
    Exporters were sold, with Panasonic Corp sliding
5.0 percent and Canon Inc dropping 1.5 percent.
    Meanwhile, Fujitsu Ltd bucked the overall market
weakness and hit a 10-month high after the company said it would
reorganise its microchip business, jumping as much as 8 percent.
    Fujitsu and Panasonic Corp said on Thursday they were
combining their struggling LSI chip units, which produce highly
customised chips used in a range of consumer electronics.
        
    SHORT-TERM CORRECTION
    Analysts said that investors stayed on the sidelines on
Friday partly because the yen's slide has paused, while some
investors are reluctant to take big positions before the
three-day weekend. Markets are closed on Monday in Japan for a
national holiday.
    With the Nikkei rising nearly 30 percent from mid-November,
when Prime Minister Shinzo Abe began calling for aggressive
monetary easing, investors have waited for the time to take
profits.
    "In the short term, Japanese shares are likely to see a
correction if the yen does not weaken further," said Chisato
Haganuma, chief strategist at Mitsubishi UFJ Morgan Stanley
Securities.
    But he said that aggressive buying by foreign investors will
likely support the market in the mid-term.
    Analysts also said that heavy trading volume indicates
investors' strong interest in the Tokyo market. On the Tokyo
Stock Exchange's main board, 5.14 billion shares changed hands
on Thursday, its second highest volume on record.
    By the midday break, the broader Topix dropped 1.0
percent to 960.00, with 2.33 billion shares changing hands,
slightly lower than Thursday.
    On Friday morning, risk appetite was low after European
Central Bank President Mario Draghi said while economic activity
in the euro area should recover gradually in 2013, there were
more negative risks than positive ones. 
 
    "Investors have traded on Japanese domestic cues related to
monetary easing, but worries about the health of the global
economy are dominating the mood today," said Nobuhiko Kuramochi,
a strategist at Mizuho Securities.
    The dollar last traded at 93.52 yen, retreating from
94.06 on Wednesday, the highest since May 2010.