Nikkei eases as nervous investors await U.S. jobs report
By Dominic Lau TOKYO, Dec 5 (Reuters) - Japan's Nikkei fell on Thursday, adding to the previous session's worst one-day drop in six weeks, as investors stayed cautious ahead of Friday's U.S. jobs report that may give more clues as to when the Federal Reserve will reduce its stimulus. The Nikkei slipped 0.4 percent to 15,344.62, dipping further from Tuesday's six-year closing high. The index shed 2.2 percent in the previous session, despite the fact that the Bank of Japan put 20.8 billion yen ($203 million) into exchange-traded funds to support the market. "Starting from two days back, people are starting to get quite nervous about the market. The yen moved to 103.3, yet the market didn't react as much as people expected," a Tokyo-based senior trader at a European bank said, pointing to only a mild market gain. "Yesterday the Nikkei dropped below 15,550 which got more people nervous because people at the moment are overly bullish," he said, adding that hedge funds were shorting the market on Wednesday while long-only investors were starting to take profits. Index heavyweight Fast Retailing Co Ltd dropped 0.7 percent, though it is still up 77 percent this year. Currency-sensitive exporters were also weaker, with Toyota Motor Corp, Honda Motor Co Ltd, Sony Corp and Toshiba Corp down between 0.5 and 0.7 percent. The change of mood in the stock market came as the yen bounced further from a six-month low versus the dollar, with investors cutting their bearish bet on the Japanese currency before the November U.S. nonfarm payrolls report. A string of economic data has suggested the recovery in the United States is gathering pace. Figures showed on Wednesday that U.S. private-sector hiring rose in November at the fastest clip in a year. A weak yen in general tends to boost sentiment in Japanese equities as investors expect earnings for exporters will be lifted by a cheap currency. STELLAR YEAR SINCE 1972? Still, the benchmark Nikkei is up about 48 percent this year, buoyed by the yen weakness after Japan's aggressive fiscal and monetary stimulus. If the gains were to hold for the rest of the year, it would be the Nikkei's best yearly rise since 1972. In terms of valuations, Japanese equities carried a 12-month forward price-to-earnings ratio of 14.5, below a 10-year average of 16 and the U.S. Standard & Poor's 500's 15.1, according to Thomson Reuters Datastream. The broader Topix index dipped 0.1 percent to 1,240.34, with volume at 25 percent of full daily average for the past 90 trading days. Foreign investors ploughed 368.7 billion yen into Japanese equities in the week through Nov. 30, Ministry of Finance data showed on Thursday, bringing the total to 13.7 trillion yen year-to-date. That compared with 2.13 trillion yen for the whole of 2012.
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