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.
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