Nikkei falls on profit-taking, BOJ meeting to support

Sun Mar 31, 2013 9:18pm EDT

* Nikkei falls 0.7 pct, Topix sheds 1.2 pct
    * Daikin Industries came under pressure after Mizuho
downgrade
    * BOJ to hold policy meeting on April 3 and 4

    By Dominic Lau
    TOKYO, April 1 (Reuters) - Japan's Nikkei share average fell
to a two-week low on Monday as investors took profit after the
benchmark posted its best quarterly performance in nearly four
years. 
    Expectations that the Bank of Japan will unveil aggressive
monetary policy measures this week to revive the world's
third-largest economy would offer some support. 
    The Nikkei eased 0.7 percent to 12,307.71 after
rallying 19.3 percent in January-March, marking its best
quarterly performance since April-June 2009, as Prime Minister
Shinzo Abe embarked on expansionary fiscal and monetary
policies.
    Helped by the rally, Japanese equities carry a 12-month
forward price-to-earnings ratio of 14.2, a level not seen since
July 2010 though still below the 10-year average of 16.4,
according to Thomson Reuters Datastream. 
    "There was a very large inflow (of programme trade) on
Friday afternoon ... I reckon the fair value absent of that
buying is at where we are," a senior trader at a foreign bank in
Tokyo said. 
    "Flow is very light out there today," he said. "I don't
think many people want to do much ahead of the BOJ on Thursday."
    However, the trader said he was cautious as many domestic
investors were likely to take profit at the start of Japan's
financial year, which began on Monday. 
    Shares succumbing to profit-taking included Softbank Corp
, Shin-Etsu Chemical and Sony Corp,
down between 1.6 and 2.6 percent.
    Daikin Industries Ltd shed 3 percent after Mizuho
Securities cut its rating on the air-conditioner maker to
'neutral" from 'buy.' 
    The broader Topix index shed 1.2 percent to
1,022.39.
    The central bank will hold a two-day policy meeting starting
on April 3, its first under new Governor Haruhiko Kuroda, an
advocate of aggressive monetary policy. 
    A BOJ survey showed big manufacturers' mood improved after
two straight quarters of deterioration, with the headline
sentiment index rising 4 points to minus 8. That was roughly in
line with a median market forecast of minus 7.
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