Nikkei surrenders early gains, turns lower on global market jitters

Sun Jun 23, 2013 10:15pm EDT

* Nikkei, Topix dip into negative territory
    * Weaker yen, Tokyo vote outcome seen as positive
    * Volatility still present - Fund manager

    By Tomo Uetake
    TOKYO, June 24 (Reuters) - Japan's Nikkei share average gave
up early gains and dipped into the red in very choppy trade on
Monday as global market volatility continued to unnerve
investors, but a weaker yen helped cushion losses.
    The benchmark Nikkei was down 0.2 percent at
13,201.11 points by mid-morning, after climbing as much as 1.7
percent earlier.
    The yen weakened against the dollar over the weekend as
momentum builds after the Federal Reserve laid out a roadmap for
scaling back stimulus.
    Against the greenback, the yen fell to as low as
98.51 yen, a level not seen in two weeks. The pair last traded
at 98.23 yen, according to EBS data.
    "The weaker yen certainly is the main driver today.
Nevertheless, investors are hesitant to buy into exporters
because the external situation, especially that of the emerging
markets, is uncertain,"said Ryota Sakagami, chief strategist at
SMBC Nikko Securities.
    "They rather sought to scoop up stocks seen as undervalued,
such as banks and non-life insurance companies."
    The broader Topix index eased 0.2 percent.
    Market players said the outcome of the Tokyo Metropolitan
Assembly election on Sunday also helped lift investor sentiment.
    Japanese Prime Minister Shinzo Abe's ruling bloc swept to
victory in a weekend Tokyo election, a sign that it is on track
for a hefty win in a July national vote that could strengthen
Abe's hand as he aims to end economic stagnation and bolster
defence. 
    "While the election results were not surprising at all, it
is also a positive for the market. It provides investors with a
sense of reassurance," said Mitsushige Akino, chief fund manager
at Ichiyoshi Asset Management.
    "But the volatility is still present in the market. Currency
movement will be in focus throughout the day," added Akino.
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