Nikkei falls as exporters weigh, GS Yuasa tumbles

Wed Mar 27, 2013 9:30pm EDT

* Euro-sensitive exporters underperform
    * GS Yuasa tumbles on Mitsubishi Motors' battery overheating

    By Ayai Tomisawa
    TOKYO, March 28 (Reuters) - Japan's Nikkei share average
dropped on Thursday as exporters fell on weakness in the euro
due to concerns about Italy's funding costs and the rescue deal
for Cyprus.
     The Nikkei dropped 0.8 percent to 12,390.18,
staying below its 5-day moving average of 12,448.48.
     Exporters with high exposure to the euro zone such as Mazda
Motor Co and Sony Corp underperformed, falling
2.5 percent and 4.0 percent, respectively, after political
uncertainty in Italy drove its borrowing costs to five-month
highs. 
    The euro last traded at 120.45 yen after dipping
to a fresh one-month low around 119.95 yen.
    "We have major events to look forward to next week (in
Japan), so investors may not build large positions this week,
and worries about Europe are souring the mood," said Kenichi
Hirano, a strategist at Tachibana Securities.
    Next week, the Bank Of Japan's tankan survey is scheduled to
be released on Monday while the central bank's first policy
meeting under its new leadership will be held April 3-4.
    Sources told Reuters the BOJ is likely to start open-ended
asset purchases immediately, rather than in 2014, and consider
setting a new target to buy longer-dated bonds at its rate
review next week. 
    On Thursday, GS Yuasa Corp, which makes lithium-ion
batteries for Boeing Co's 787 Dreamliner jet and for some
automakers, tumbled 14.5 percent after Mitsubishi Motors Corp
 said a lithium-ion battery on their plug-in hybrid
Outlander vehicle overheated last week. The automaker shed 3.9
percent.
    "Investors are adjusting their positions as the Nikkei has
gained sharply in a short period of time," said Nobuhiko
Kuramochi, a strategist at Mizuho Securities.
    The Nikkei has gained 19 percent this year on Prime Minister
Shinzo Abe's bold monetary and expansionary policies, lifting
exporters and such reflationary stocks as banks and real estate
stocks. During the term, the benchmark S&P 500 has gained
9.6 percent, the Dow Jones industrial average has added
11 percent and the FTSEurofirst 300 index has merely
advanced 4.4 percent.
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