Nikkei edges down, investors wary as earnings eyed; Canon tumbles

Wed Jul 24, 2013 10:06pm EDT

* Nikkei eases 0.3 pct, Topix down 0.5 pct
    * Canon sinks after cutting full-year profit outlook
    * Investors await more blue-chip earnings reports

    By Tomo Uetake
    TOKYO, July 25 (Reuters) - The Nikkei share average slipped
on Thursday morning, as investors looked past a weaker yen to
the earnings season with blue-chip Canon Inc tumbling
after slashing its profit outlook due to slowing demand in China
and other economies. 
     The benchmark Nikkei eased 0.3 percent to 14,691.44
in midmorning trade, after rising as high as 14,748.77 at the
open. The broader Topix dropped 0.5 percent to 1,213.31.
    "As the market has been in overbought territory, technically
speaking, investors stayed on the sidelines. Although the weaker
yen lent some support to the market, there are few factors to
buy," said Yasuo Sakuma, portfolio manager at Bayview Asset
Management.
    Many market players are waiting for earnings reports from
some of the top companies to determine the market direction, he
added. "For example, if Nissan raises its full-year forecast
today, that would impact on other automakers and the overall
market."
    The April-June quarter earnings season got underway this
week, though most blue-chip earnings will kick-off only over the
coming days, with Nissan announcing its quarterly
results after the market close on Thursday.
    Canon tumbled 5.7 percent and was the most traded stock by
turnover on the main board, after the world's largest digital
camera maker cut its operating profit forecast for the year by
16 percent, citing a slowdown in China and other emerging
economies. 
    Canon contributed 12 negative points to the Nikkei. The
worries about slack demand for cameras also hit rival Nikon Corp
, which fell 4.4 percent.
    China is Japan's second-biggest export market.
    On the upside, Hitachi Chemical Co jumped 5.5
percent after the company said its operating profit for the
first quarter rose by 11 percent and raised its full-year net
profit outlook by 18 percent. 
    The yen was last traded at 100.13 yen against the
dollar, moving away from under 100 yen seen at the start of the
week after the greenback rallied across the board on Wednesday.
    The Japanese currency is down 16 percent versus the dollar
for the year, weighed by the Bank of Japan's radical monetary
stimulus launched in April to end years of stubborn deflation
and foster growth. Some of the benefits of a weaker yen are
expected to show up in corporate results and their outlooks.
    The Japanese government's fiscal expansionary policy,
coupled with the BOJ's aggressive monetary stimulus, have helped
push the benchmark Nikkei up 42 percent this year.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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