Nikkei tumbles to 1-month low as yen roughs up exporters

Mon Jan 13, 2014 9:13pm EST

* Stronger yen hurts overall market mood
    * Suntory Beverage rises after parent buys U.S. firm
    * Brokerages sell Nikkei, Topix futures - traders

    By Ayai Tomisawa
    TOKYO, Jan 14 (Reuters) - Japan's Nikkei average tumbled
more than 2 percent to a one-month low on Tuesday after the yen
rose sharply following a weaker-than-expected U.S. payrolls
report, driving down shares of exporters like Toyota Motor.
    Bucking the weakness, Suntory Beverage & Food Ltd 
climbed 2.4 percent after parent Suntory Holdings said it would
buy U.S. spirits company Beam Inc for $13.6 billion.
 
    U.S. employers hired the fewest workers in nearly three
years in December, although the setback was likely to be
temporary amid signs that unusually cold weather may have had an
impact. 
    "Today's drop has to do with the nine-day rally at the year
end. Foreign investors who bought then are reducing their risky
assets," said Norihiro Fujito, senior investment strategist at
Mitsubishi UFJ Morgan Stanley Securities.
    "The part that there was a seasonal reason for the weak U.S.
jobs data didn't shock us that much, but the steep rise in the
yen was a bit surprising," he said.
    The Nikkei was down 2.5 percent at 15,520.06 in
midmorning trade after falling as far as 15,475.11, its lowest
level since Dec. 18. The Nikkei was trading below 15,573.87, the
61.8 percent retracement from its Dec. 6 low to its Dec. 30
high.
    The broader Topix dropped 2 percent to 1,272.17,
with all of its 33 subsectors in negative territory.
    Japanese financial markets were closed on Monday for a
national holiday.
    The dollar fell more than 1 percent overnight - its biggest
one-day drop since Sept. 18 - and last traded at 103.05 yen
, as investors reassessed how quickly the Federal Reserve
might scale back its stimulus after the soft jobs data.
    A stronger yen erodes the competitiveness of Japanese
exporters abroad and their dollar earnings when repatriated.
    Toyota Motor Corp shed 2 percent and was the
third-most traded stock by turnover. Sony Corp fell 3.1
percent and Honda Motor Co dropped 3.4 percent.
    Market heavyweights SoftBank Corp stumbled 3.5
percent and Fast Retailing Co slid 3.3 percent.
    Traders said brokerages like Credit Suisse and Goldman
Sachs, which had aggressively bought Nikkei and Topix futures at
the year-end, were selling to take profits.
    But Dip Corp soared 24 percent and was the biggest
percentage gainer after the staffing agency raised its dividend
payout to 23 yen per share for the year ending in February, much
higher than its forecast of 8 yen.
    The JPX-Nikkei Index 400, a new index comprised
of companies with high return on equity and strong corporate
governance to appeal to investors which started trading on Jan.
6, slid 2 percent to 11,476.94.