Nikkei down as Aso plays down foreign bond buy talk, Fanuc weighs

Tue Feb 19, 2013 2:20am EST

* Aso's comment not considering buying foreign bonds sours
mood
    * BOJ governor appointment, Abe's visit to U.S. on focus
    * Fanuc's fall weighs on index
    * Bridgestone pulls up tyre companies on strong earnings

    By Ayai Tomisawa
    TOKYO, Feb 19 (Reuters) - Japan's Nikkei share average edged
down on Tuesday as Japanese Finance Minister Taro Aso played
down talk of foreign bond buying by the central bank, while
index heavyweight Fanuc Corp dropped on weak machine
tool orders from China. 
    Analysts said that the Japanese market's rise had steadied
while the yen's fall had lost momentum as investors grew wary of
taking large positions until there was clarity on Bank of
Japan's next governor.  
    Investor sentiment soured on Tuesday after Finance Minister
Taro Aso told a news conference he was not considering foreign
bond purchases for monetary stimulation. 
    His comments sent the dollar as low as to 93.56 yen,
with exporters losing ground as investors assessed how far a new
BOJ governor could practically expand monetary stimulus. 
   "The appointment of the new governor will somewhat determine
the direction of the Nikkei for the short term," said Takuya
Takahashi, an analyst at Daiwa Securities.        
    The Nikkei dropped 0.3 percent to 11,372.34, after jumping
2.1 percent on Monday to near a 4-year high struck on Feb. 6.
    Economy Minister Akira Amari said on Tuesday the government
will decide on the Bank of Japan's new governor and two deputies
after Prime Minister Abe returns from a trip to the United
States over Feb. 21-24.
     Daiwa's Takahashi added that in the longer term, the
appointment should have a limited impact on the market, with
most investors convinced that whoever takes the job will have to
implement an easy monetary policy under Abe-led government.
    Index heavyweight Fanuc weighed on the benchmark after the
Japan Machine Tool Builders' Association said machine tool
orders to China had dropped 65 percent in January compared to
the previous year.
    Robotics builder Fanuc dropped 4.1 percent, taking 24.7
points off the benchmark.
    Carmakers weakened, with Toyota Motor Corp falling
0.9 percent, Nissan Motor Co dropping 1.1 percent and
Mazda Motor Corp shedding 0.7 percent.
    The broader Topix added 0.1 percent to 963.61 as
stellar profits for tyre maker Bridgestone Corp helped
the rubber products sub-index jump 8.0 percent as the
best-performing sector.
    Bridgestone soared 10 percent after the tyre maker announced
a 50 percent increase in its operating profit for the year ended
Dec. 31, and overshot analysts' estimates with its current year
profit forecast.
    The stock was the third-most-traded stock by turnover on the
main board.
    On the main board, volume was thin, with 2.69 billion shares
changing hands, compared with last week's daily average volume
of 4.03 billion shares.
     Abe and U.S. President Barack Obama are expected to discuss
Japan's possible entry into regional free trade talks with the
United States later this week.  
    ""We would expect a positive impact on share prices if the
Japanese government clarifies its views on participation in the
TPP (Trans-Pacific Partnership) at the US-Japan summit, and
starts to roll out growth strategy initiatives seriously," said
Hiromichi Tamura, chief strategist at Nomura Securities.