Nikkei falls as market stays risk averse before U.S. jobs data

Wed Jan 8, 2014 8:49pm EST

* Topix 33 subsectors in negative territory
    * All eyes on U.S. payroll data
    * Market should brace for higher U.S. yield if data sharply
exceed forecasts - analyst

    By Ayai Tomisawa
    TOKYO, Jan 9 (Reuters) - Japan's Nikkei share average fell
on Thursday morning after rising sharply on the previous day, as
investors stayed risk averse before the release of U.S. nonfarm
payroll data on Friday.
    The Nikkei dropped 1.3 percent to 15,915.27 in
mid-morning trade after soaring 1.9 percent on Wednesday.
    The broader Topix index, which jumped 1.8 percent to
end Wednesday at its highest since July 2008, shed 0.7 percent
to 1,297.43. All of its 33 subsectors were in negative
territory.
    "Investors stayed risk-off before the major event (Friday's
jobs data), but in the mid-to-long term, Japanese shares are on
the rise," said Takatoshi Itoshima, chief portfolio manager at
Commons Asset Management.
    Financials, which were bought on the previous day by what
traders said seemed like foreign pension funds and other foreign
funds, lost ground on profit-taking. Mizuho Financial Group
 dropped 1.7 percent and was the second-most traded
stock by turnover, while Mitsubishi UFJ Financial Group 
fell 1.5 percent.
    The JPX-Nikkei Index 400, which started trading
on Monday, dropped 0.8 percent to 11,709.84.
    All eyes are on Friday's nonfarm payroll report, which will
give further clues on how well the U.S. economy is recovering
and how fast the Federal Reserve will scale back its stimulus
program.
    Economists polled by Reuters expect 196,000 jobs to have
been added to the U.S. economy in December.
    "If it exceeds the forecast sharply, say, way higher than
200,000 jobs, we need to watch out for a possible rise in the
U.S. long-term interest rate," said Nobuhiko Kuramochi, a
strategist at Mizuho Securities.
    Other recent gainers also dropped, with Nintendo Co 
shedding 3.3 percent after jumping 11 percent as China
temporarily lifted a 14-year ban on selling video game consoles,
while infrastructure-related stock Mitsubishi Heavy Industries
Ltd slid 1.0 percent.
    However, Sony Corp bucked the weakness, rising 2.7
percent, with traders saying investors pushed the stock price to
reflect the price of Sony's American depository receipts.
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