Nikkei edges down, exporters fall as yen selling pauses

* Warehouse shares buck weakness on hopes for further
monetary easing
* Foreigners continue to pour money into Japanese stocks -
analyst

By Ayai Tomisawa
TOKYO, March 13 (Reuters) - Japan's Nikkei share average was
down at the midday break on Wednesday after a volatile morning
session, with many exporters reversing earlier gains as the
yen's weakness paused.
The Nikkei dropped 0.5 percent to 12,251.70 after
flirting with positive territory several times until exporters
sold off as the yen-selling exhausted.
The index stood 1.7 percent below a 4-1/2 year high of
12,461.97 hit in early trade on Tuesday.
Exporters were weaker after the dollar fell below 96 yen,
with Canon Inc dropping 2.1 percent and Toyota Motor
Corp shedding 0.5 percent.
"The Nikkei is seeing a little correction. When the index
moves away from its 25-day moving average by more than 5
percent, there usually is a technical adjustment," said Kenichi
Hirano, strategist at Tachibana Securities.
The Nikkei is currently trading 5.6 percent above its 25-day
moving average of 11,597.42.
The broader Topix shed 0.4 percent to 1,031.63.
Hot money flows continue to support the Nikkei, though
market players said that domestic investors may restrict their
activity as they look to new fund allocations after the
financial year-end on March 31.
"As the fiscal year-end nears, domestic investors sell to
adjust their positions; they will likely move to the sidelines
soon and they won't invest aggressively until new funds are
allocated in April... but hot money is pouring into the Japanese
market as foreign investors are buying," said Norihiro Fujito,
senior investment strategist at Mitsubishi UFJ Morgan Stanley
Securities.
On Wednesday, ahead of the market open, foreigners were net
buyers of Japanese stocks for the sixth straight day.
Warehouse companies, which have large asset values and are
beneficiaries of Prime Minister Shinzo Abe's reflationary
policy, bucked the weakness. Shibusawa Warehouse Co
gained 3.6 percent and Mitsui-Soko Co surged 5.8
percent.
Nikon Corp rose 5.0 percent after the Nikkei
business daily said that at the close of the current fiscal year
ending March 31 the camera maker plans to cut back inventory by
20 percent from December levels, through re-examining its
marketing strategy and streamlining production.
The Nikkei has gained 18 percent this year and 6 percent
this month, as the likely higher overseas income for exporters
on the back of the weakening yen and hopes for more monetary
easing encouraged investors to back equities.
The yen hit a fresh 3-1/2 year low of 96.71 on Tuesday on
hopes that the Bank of Japan might deliver expected monetary
stimulus sooner rather than later.
Japan's main opposition Democratic Party decided on Tuesday
to back the government's nominee for the Bank of Japan governor,
a lawmaker said, making it certain Haruhiko Kuroda will land the
top job at the central bank later this month.