Nikkei slips 0.5 pct as Fed uncertainty, shakeout in global markets weigh

Mon Aug 19, 2013 11:02pm EDT

* Nikkei falls 0.5 pct, Topix down 0.2 pct
    * Companies with large exposure to emerging markets tumble
    * Exporters weigh on market

    By Tomo Uetake
    TOKYO, Aug 20 (Reuters) - Japan's Nikkei average edged lower
on Tuesday morning, weighed down by concerns about the U.S.
Federal Reserve's plans to reduce its massive stimulus with
companies that are heavily exposed to emerging markets leading
the losses.
    The benchmark Nikkei shed 0.5 percent to 13,684.60
by the midday break, while the broader Topix eased 0.2
percent to 1,146.71.  
    The Nikkei took its early lead from U.S. stocks, where each
of the major indices fell for a fourth straight session on
Monday, as investors were hesitant to make new bets ahead of an
expected shift in Fed policy that could lead to higher interest
rates. The U.S. stimulus uncertainty has roiled global markets
in recent months.
    "Most investors seem to have taken a wait-and-see attitude,
while no massive speculative futures trading was noted so far,"
said Kenichi Hirano, a strategist at Tachibana Securities.
"Investors are nervously eyeing the emerging markets, including
India, Indonesia and China."
    The Indian rupee and the Indonesian rupiah slumped on Monday
as the expected withdrawal of U.S. monetary stimulus prompted
investors to pull back from emerging markets.
    Companies with large exposure to emerging markets, such as
India and Indonesia, tumbled on Tuesday, with Suzuki Motor Corp
 and Daihatsu Motor Co Ltd falling 5.1 percent
and 3.7 percent, respectively, and Yamaha Motor Co Ltd 
dropping 4.2 percent.
    Major exporters also lost ground, and were a drag on the
market, despite the yen pulling back from recent multi-week
highs against the dollar, as investors remained cautious given
the greenback's recent strength.
    Sony Corp lost 1.2 percent and Toyota Motor Corp.
 dropped 1.1 percent. 
    The yen was last quoted at 97.74 yen to the dollar,
little changed from Monday but keeping some distance from a
seven-week high around 95.81 yen touched earlier this month.
    A weaker yen sharpens Japanese exporters' competitive edge
in global markets and boosts their dollar earnings when
repatriated.
    Bucking the broader market weakness, Kansai Electric Power
Co Inc jumped 4.8 percent after Mitsubishi UFJ Morgan
Stanley Securities raised its rating, citing a likelihood of
restarting its nuclear reactors that are currently shut for
inspection.
    Despite the recent falls, the benchmark Nikkei is still up
32 percent this year, spurred by the government's expansionary
fiscal policy and the Bank of Japan's aggressive monetary
stimulus.
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