Nikkei edges down on pause in yen's slide, soft China PMI

Mon Apr 22, 2013 11:28pm EDT

* Some exporters succumb to profit-taking
    * Yen off lows after USD/JPY fails to clear 100
    * China HSBC Flash PMI falls in April

    By Tomo Uetake
    TOKYO, April 23 (Reuters) - Japan's Nikkei average eased on
Tuesday, hurt by weak Chinese manufacturing data, while
investors also locked in some of the recent gains after the
yen's slide towards 100 to the dollar paused. 
     However, the underlying mood remained positive on bold
efforts by the government and central bank to revive the
economy, helping support the Nikkei, which fell 0.3
percent to 13,530.01 by the midday break.
    "Uncertainties over the global economy are making investors
reluctant to chase the stocks higher for now," said Shun
Maruyama, chief Japan equity strategist at BNP Paribas
Securities, referring to weak economic data overseas. 
    "Many of them are kind of waiting for the fog to clear."
    The Nikkei China 50 index, which comprises of
companies with significant exposure to the world's
second-largest economy, dropped 0.5 percent after growth in
China's vast factory sector dipped in April as new export orders
shrank. 
    The PMI release adds to the recent run of soft data from
China and the United States, suggesting the global economic
recovery may have stalled.
    The Nikkei ended at its highest closing level since
July 2008 on Monday after the Group of 20 leading economies
stopped short of criticising Tokyo's sweeping expansionary
monetary policies.   
    But the yen failed to push to 100 to the dollar after
hitting a low of 99.89 on Monday. The Japanese currency was last
traded at 98.935 to the greenback.
    Equity investors took that as a cue to lock in some profits,
with Daikin Industries, Toshiba Corp and Ricoh
Ltd down between 1.9 and 2.1 percent.
    Investors also pocketed gains in shares of financial and
real estate companies, which are expected to benefit the most
from the Japan's reflationary policy, after their recent sharp
rally.
    "Today we see another round of profit-taking in real estate
and J-REIT (real estate investment trust)," said Yasuo Sakuma,
portfolio manager at Bayview Asset Management.
    "Both institutional and retail investors are waiting for
weakness to increase their positions."
    The real estate sub-index lost 2 percent on
Tuesday morning and was the worst performing sector on the main
board. 
    Yet, it is still up 106 percent since mid-November, when
Shinzo Abe, who became Prime Minister in December, promised bold
monetary and fiscal expansionary policies during his election
campaign. The benchmark Nikkei has rallied 56 percent during the
same period.
    The Bank of Japan's massive stimulus programme announced
earlier this month, with a commitment to inject $1.4 trillion
into the economy in less than two years to reignite growth, has
provided fresh momentum to Nikkei bulls.
    The banking sector shed 1 percent, with Mizuho
Financial Group Inc down 1.4 percent. 
     The broader Topix index inched down 0.2 percent to
1,143.05 by the midday break, with volume at 70 percent of its
full daily average for the past 90 trading days.
     Bucking the weakness on Tuesday, Oki Electric Industry Co
Ltd surged 18.6 percent after the Nikkei newspaper said
the telecommunication equipment maker's operating profit for
this fiscal year through March is expected at 22 billion yen
($222 million), which is almost double that of the previous
year, due to strong ATM sales in China.