Nikkei slips ahead of U.S. job data, Sony falls after earning cut

Thu May 1, 2014 10:14pm EDT

* Buying loses steam near resistance at 14,500-14,600
    * Dwindling expectation of BOJ easing caps market
    * Sony falls after dismal earnings
    * IHI gains after Third Point takes position

    By Hideyuki Sano
    TOKYO, May 2 (Reuters) - Japanese shares stepped back on
Friday, with Sony Corp. falling after a profit warning and as
investors took a cautious stance ahead of a closely-watched U.S.
employment report later in the day.
     The Nikkei share average ticked down 0.3 percent to
14,446.28, halting a recovery from Monday's low of 14,224.47.
    An initial resistance is seen at around 14,500, which is the
 25-day moving average. Another resistance, Ichimoku cloud
bottom, also comes in around 14,600.
    Investors were waiting on the U.S. April jobs report later
in the global session for signs the recent dismal first quarter
GDP report was merely a blip before a rebound. The data is
expected to show employment rose at its fastest clip in five
months according to a Reuters survey of economists.
[D:L2N0NL1EX]
    Sony Corp was in the spotlight, dropping 2.3
percent, a day after it slashed its operating profit estimate by
nearly 70 percent for the financial year ended March 31, saying
it expects its exit from PCs to add nearly $300 million in extra
costs as it struggles to stem losses on electronics.
 
    On the other hand, IHI Corp jumped 4.9 percent to
428 yen after billionaire investor Daniel Loeb said his $14.3
billion Third Point hedge fund took a position in the Japanese
heavy machinery manufacturer.
    Loeb said the company is worth more than its 1,000 yen share
price and that earnings could be boosted if the company focused
more on "high return segments," moving away from its "suboptimal
conglomerate structure of the past." 
    Concerns about slowing growth has depressed the Nikkei this
year, which has underperformed many major markets after a
record-breaking rally of over 50 percent in 2013 thanks to
Tokyo's aggressive stimulus policies.
    Dwindling expectations of fresh stimulus by the Bank of
Japan have also weighed on sentiment, as Governor Kuroda has
repeatedly insisted in recent weeks that the economy can weather
the impact of the sales tax hike that took effect last month.
    "The BOJ's easing looks so distant now. I would think it's
unlikely to take place this year," said Norihiro Fujito, senior
investment strategist at Mitsubishi UFJ Morgan Stanley
Securities.
    "That is why the market's turnover last month fell to about
a half of its peak seen in May last year. The market's energy
has eased," he added.
    Trading volume was low on Friday, with Golden Week holidays
in Japan shutting markets until Tuesday. London will be closed
on Monday as well.
    Much of the trade lacked conviction. Among big cap shares,
Toyota fell 0.5 percent, while Mitsubishi UFJ Financial
Group rose 0.9 percent.
    The broader Topix fell 0.1 percent to 1,181.05 while
the new JPX-Nikkei Index 400 dipped 0.1 percent to
10,734.12.

 (Reporting by Hideyuki Sano; Editing by Shri Navaratnam)