Nikkei drops to seven-week lows as emerging market tension weighs
* Tension over emerging markets keep investors away from risk * Fed minutes due later on Wednesday * Titanium shares shine on Credit Suisse upgrade By Ayai Tomisawa TOKYO, Aug 21 (Reuters) - Japan's Nikkei share average weakened to fresh seven-week lows on Wednesday on concerns that the U.S. Federal Reserve will soon start tapering its monetary stimulus, drawing more capital out of Asia. Those worries have been exacerbated by sharp slides in Asian emerging currencies and stock markets. "Investors are awaiting the Fed minutes for more clues now. At the same time, tension over emerging markets' currencies and stocks is keeping investors from taking on risk," said Nobuhiko Kuramochi, a strategist at Mizuho Securities. Tokyo Electric Power Co tumbled 6.2 percent to a 3-1/2 week low and was the most traded stock by turnover after it said water with dangerously high levels of radiation is leaking from a storage tank at Japan's crippled Fukushima nuclear plant. The Nikkei fell 0.9 percent to 13,277.91 in mid-morning trade, extending a 2.6 percent loss a day earlier. It is down 17 percent from its May peak of 15,942.60 but is still up 28 percent for the year to date . The Topix dropped 0.8 percent to 1,116.23. Exporters lost ground as the dollar fell against the yen. Toyota Motor Corp dropped 2.0 percent, while Honda Motor Co shed 1.2 percent. A stronger yen cuts into the value of earnings garnered abroad and hurts exporters' competitiveness. The Federal Open Market Committee will release minutes of its July 30-31 meeting on Wednesday, with investors eager for clues as to whether the Fed will reduce its $85 billion monthly purchases of U.S. bonds at its September 17-18 meeting. Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said market would likely stay weak in thin volume until U.S. jobs data is released in the first week of September. But titanium makers gained after ratings upgrades from Credit Suisse. Toho Titanium Co jumped 8.4 percent and Osaka Titanium Technologies Co soared 11 percent. "We expect a healthy backlog for aircraft orders, aircraft production to ramp up, and other factors to make the next upswing in the cycle a substantial one," Credit Suisse wrote in a report.
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