Nikkei sheds on profit-taking after rapid rise, brokers fall

Mon May 13, 2013 9:49pm EDT

* Brokerage stocks fall on profit-taking
    * Nikkei and Topix in and out of positive territory
    * Pioneer soars on capital alliance

    By Ayai Tomisawa
    TOKYO, May 14 (Reuters) - The Nikkei share average edged
down on Tuesday after rising earlier for a third day, as
investors pocketed gains from the rapid pace of the latest
rally, but losses were limited by ongoing optimism from the
weak-yen trend.
    The Nikkei dropped 0.1 percent to 14,770.78 in
mid-morning trade, moving away from a 5-1/2 year high of
14,849.01 tapped on Monday, seen as a reflection of natural
caution after the market's recent steep gains. 
    Brokerage stocks lost ground after soaring the previous day
on expectations of much higher commission income as trading
volume surged. Nomura Holdings fell 1.5 percent and
Daiwa Securities dropped 1.6 percent.
    Struggling audio equipment maker Pioneer Corp 
jumped 33 percent and was the second biggest percentage gainer
after saying it would form a capital alliance with NTT DoCoMo
Inc and increase ties with Mitsubishi Electric Corp
 to improve its financial base.
    Exporters were mixed. Toyota Motor Corp shed 0.8
percent, Honda Motor Co dropped 0.5 percent, but Sony
Corp rose 2.1 percent.
    "The market is short of new catalysts for now as most of the
corporate earnings are out. Since we have confirmed that
companies' conservative earnings forecasts for this year will be
revised up, the mid-term trend should be positive," said
Nobuhiko Kuramochi, strategist at Mizuho Securities. "Under the
current guidance from companies, the Nikkei's resistance level
is seen around 15,000."
    Most exporters based their foreign exchange assumptions at
90-95 yen to the dollar for the year ending March 2014, while
the dollar trades around mid-101 levels. The weaker yen lifts
exporters' competitiveness abroad and raises profits when
repatriated.
    "The market expects earnings upward revisions in the fall,
when prospects for the fiscal year end will be clearer. Then,
the Nikkei's levels at 16,200-17,300 will be in sight,"
Kuramochi said.
    The broader Topix shed 0.2 percent to 1,229.55.
    Since the dollar pierced the 100 yen mark last Thursday, the
Nikkei has gained 4.2 percent and is trading about 8.5 percent
above its 25-day moving average.
    "The market is seesawing between worries about the steep
rises and hopes for the government's growth strategy," said
Yoshiyuki Kondo, an analyst at Daiwa Securities. "It seems like
good timing to see a pause in the market."
    The Nikkei has gained about 42 percent this year, bolstered
by expectations for the government's growth policies and
aggressive monetary easing by the Japanese central bank.
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