Nikkei falls for 2nd day on exporters; Sony sags after rejecting fund plan

Mon Aug 5, 2013 9:44pm EDT

* Volume likely to stay thin - analysts
    * Strong yen hurts exporters
    * Company earnings overall good - Mizuho Securities

    By Ayai Tomisawa
    TOKYO, Aug 6 (Reuters) - Japan's Nikkei share average fell
for a second day on Tuesday,  on the yen's strength against the
dollar, while Sony Corp tumbled after rejecting
proposals from a U.S. fund to spin off a part of its
entertainment business.
    Exporters took a hit, with Toyota Motor Corp 
falling 1.6 percent and Honda Motor Co shedding 0.8
percent after the dollar fell 0.6 percent to 98.31 yen 
overnight. It was last traded at 98.04 yen.
    A rise in the yen hurts Japanese exporters' competitiveness
overseas as well as their earnings when repatriated.
    The Nikkei dropped 1.4 percent to 14,064.88 in
midmorning trade, staying below both its 5-day and 25-day moving
averages but was supported above its 75-day moving average of
13,976.77.
    As of Monday, 1,519 listed companies, excluding utility
firms and financials whose business year ended in March, had
reported their quarterly results, and on aggregate their pretax
profit rose by 35 percent on the year, while sales rose by 8
percent, Mizuho Securities said.
    "We blame the yen's rise... we had some blue chip companies
like Toyota reporting stellar earnings, but as the yen has
strengthened those companies have failed to lift the market and
we missed a rally," said Yoshiyuki Kondo, a strategist at Daiwa
Securities.
    The Topix dropped 1.0 percent to 1,172.93.
    Sony Corp was one of the notable decliners, falling
3.5 percent and was the third most traded stock after it
rejected proposals from activist shareholder Daniel Loeb of
Third Point to spin off a part of its entertainment business.
    "I think the chances that Third Point will sell its shares
are slim, although the market seems to be reacting to that slim
chance today. A fall in Sony shares from this particular news
should be limited," said Makoto Kikuchi, chief executive of
Myojo Asset Management, adding that the hedge fund may yet
appeal directly to Sony shareholders next June, a large number
of whom are foreign investors.
    On Tuesday, investors are expected to remain focused on
earnings news season for direction. 
    Corporate earnings from companies such as Isuzu Motor Motors
Ltd and Suntory Beverage & Food are expected
later in the day.
    Market observers said that Tuesday's trading volume may stay
 thin, after Monday's volume for both the Nikkei and the Topix
 was the lowest since December 2012.
    For the Topix, only 1.99 billion shares changed hands,
falling below 2.0 billion shares for the first time since
December and down 23 percent from last week's average daily
volume of 2.6 billion shares.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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