Nikkei falls on U.S. stimulus withdrawal fears; GS Yuasa soars

Wed Jun 19, 2013 9:34pm EDT

* Nikkei down 0.7 pct, Topix off 0.6 pct
    * Real estate shares down
    * GS Yuasa soars on battery JV with Bosch

    By Ayai Tomisawa
    TOKYO, June 20 (Reuters) - Japan's Nikkei share average fell
on Thursday after Federal Reserve Chairman Ben Bernanke
confirmed market fears that the U.S. central bank could trim its
bond buying programme later this year, but a weakening yen
lifted some exporters and limited the declines.
    The Nikkei was down 0.7 percent at 13,147.74 points
by midmorning trade after briefly dipping below the 13,000 mark.
   
    "The market's weakness shows that the Fed's decision to
indicate exit strategy was too soon," said Masaru Hamasaki,
senior strategist at Sumitomo Mitsui Asset Management.
    Bernanke said on Wednesday the U.S. economy is expanding
strongly enough for the Fed to begin slowing the pace of its $85
billion monthly purchases of Treasuries and mortgage-backed
securities, with the goal of ending it in mid-2014.
    Real estate stocks were battered, with Mitsui Fudosan Co
 falling 2.4 percent, Mitsubishi Estate Co 
shedding 1.5 percent and Sumitomo Realty & Development 
tumbling 3.8 percent.
    But the yen's weakness limited losses, lifting some
exporters, with Toshiba Corp gaining 1.3 percent, Mazda
Motor Corp rising 3.0 percent and Sony Corp 
adding 0.7 percent.
    The dollar last traded at 96.60 yen, after rising as
high as 96.93 yen on Wednesday.
    GS Yuasa Corp surged as much as 11.1 percent after
the German industrial group Robert Bosch GmbH said it
had agreed to work on next-generation lithium-ion batteries with
the battery maker and Mitsubishi Corp.
    The broader Topix shed 0.6 percent.
    But analysts said that the negative impact from the Fed's
stance should be short-lived as ending quantitative easing would
mean that the Fed is confident that unemployment is falling and
the real economy has returned to a self-sustained recovery.
    "If the Fed makes this shift, it would be difficult to
imagine a prolonged downturn of U.S. and Japanese stocks because
a transition would be taking place from monetary policies to
corporate earnings as the driving force behind stock prices,"
Ryoji Musha, president of Musha Research, wrote in a note.
    Analysts also said that there are some technical signals
showing that Japanese stocks have hit a bottom, noting that the
Nikkei's 5-day and 25-day moving averages are rising.
    The Nikkei has lost 17 percent since hitting a 5-1/2 year
peak on May 23 on concerns over Fed stimulus as well as slowing
growth in China, Japan's second-largest export market, and
disappointment over Prime Minister Shinzo Abe's growth strategy
to revive the economy.
    It entered a bear market last week after dropping more than
20 percent from that multi-year high, but is still up 27 percent
this year.
    On Wednesday, U.S. stocks fell more than 1 percent after Fed
Chairman Bernanke said he expects to slow the pace of the Fed's
bond purchase later this year if the economy was strong enough.