Nikkei falls to fresh 2 1/2-month low on ongoing emerging market woes

Sun Feb 2, 2014 8:59pm EST

* Short-term, retail investors pick up earnings-related
stocks - trader
    * Super Bowl keeps trading subdued - trader
    * U.S. jobs data in focus this week - analysts

    By Ayai Tomisawa
    TOKYO, Feb 3 (Reuters) - Japan's Nikkei share average fell
to a fresh 2 1/2-month low on Monday, extending last week's
declines with little sign that emerging market woes have abated,
and upcoming U.S. jobs data keeping investors risk-shy. 
    The Nikkei dropped 1.0 percent to 14,764.31 in
mid-morning trade after touching as low as 14,711.48 earlier,
the lowest since Nov 14. It fell 7.8 percent for the last week
hit by concerns about a sell-off in emerging market assets.
    For the month of January, the benchmark fell 8.5 percent,
its worst monthly percentage decline since May 2012.
    On Friday, European and U.S. markets took a hit while the
Russian rouble and the Turkish lira came under renewed
pressure in the currency markets.
    Analysts said that they had expected a sharper sell-off in
Tokyo on Monday after seeing the Nikkei futures closed at 14,610
in Chicago. But they said that sentiment has been helped as the
dollar is trading above 102.20 yen, above an eight-week
low of 101.77 yen hit last Monday.
    "Unless the dollar falls below 102 again, the Japanese
market should be supported. Also, most people expect strong
earnings from major Japanese companies this week," said Hikaru
Sano, a senior technical analyst at Daiwa Securities, adding
investors will not likely take large positions until U.S. jobs
data are released this Friday.
    
    EARNINGS-RELATED NAMES GAIN
    Traders also said that Sunday's Super Bowl has kept trading
subdued.
    "Foreign investors cannot worry about trading now, they are
glued to the game," a trader at a foreign brokerage said.
"Short-term investors and retail investors are picking up
earnings-related stocks today." 
    The Topix shed 1.0 percent to 1,208.53.
    Index-heavyweight stocks were mostly weak, with SoftBank
Corp falling 2.2 percent and was the most traded stock
by turnover, while Fast Retailing Co dropping 2.3
percent.
    Sony Corp shed 1.9 percent to the lowest since May
2013 after Japanese broadcaster NHK reported on the weekend that
the company and Lenovo Group are in talks about a
possible joint venture to take over Sony's loss-making Vaio PC
business overseas. Sony called the report inaccurate while
acknowledging that it was looking at various possibilities for
the unit. 
    "The report basically gave the market a muted reaction. Sony
has been weak since last month's Moody's downgrade," said a fund
manager at a Japanese asset management firm. "If the company is
selling its poorly-performing PC business, the stock price will
likely rise."
    Bucking the weakness, Shiseido Co rose 2.8 percent
after the cosmetics company raised its earnings forecast for the
year ending March. It now expects an operating profit of 42
billion yen, up from previously forecast 40 billion yen and 
sales of 750 billion yen, up from 740 billion yen.
    Fanuc Corp gained 3.3 percent after the factory
automation robot maker said its orders for the Oct-Dec quarter
was bigger than the market expected.
    The JPX-Nikkei Index 400, an index launched this
year comprised of firms with high return on equity and strong
corporate governance, shed 0.9 percent to 10,939.71.
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