Nikkei edges down on profit-taking; MUFG rises on brokerage upgrade

Mon Jun 9, 2014 10:01pm EDT

* Low turnover shows long-term investors not participating -
trader
    * Trading choppy after investors stay on the sidelines
    * MUFG surges after BoA Merrill hikes it to 'buy'

    By Ayai Tomisawa
    TOKYO, June 10 (Reuters) - Japan's Nikkei share average
edged down Tuesday morning in choppy trade as investors took
profits after the index hit a three-month high the previous day,
but losses were limited by another rise on Wall Street.
     Bucking the trend, Mitsubishi UFJ Financial Group 
gained 1.5 percent and was the third most traded stock after
Bank of America Merrill Lynch raised its rating to 'buy' from
'neutral', citing strong non-traditional lending.
    The Nikkei shed 0.3 percent to 15,081.64 in
mid-morning trade after rising as high as 15,184.77 earlier. On
Monday, the index added 0.3 percent to 15,124.00, its highest
closing level since March 11, helped by a solid U.S. jobs
report.
    However, Monday's turnover on the Tokyo Stock Exchange's
main board was a two-week low of 1.567 trillion yen. Traders
said long-term foreign investors stayed on the sidelines.
    "Short-term hedge funds and retail investors are the main
players," said Makoto Kikuchi, the chief executive at Myojo
Asset Management. "Trading has been subdued and it may stay this
way for a while."
    He said that in the short-term, foreign investors were
awaiting such cues as the Japanese government's planned release
of the third arrow of 'Abenomics,' or long-term growth strategy.
    Prime Minister Shinzo Abe is expected to announce a package
of broad economic policies, along with a detailed "growth
strategy" of structural reforms, around June 27.
    Abe says he wants to cut the corporate tax rate, but
resistance from fiscal hawks prevented such a proposal from
being part of an outline of the package released on Monday.
 
    "Unless the Japanese market can impress mid-to-long foreign
investors, it would be difficult to expect substantial rises,"
Kikuchi said.
    Exporters were mixed, with Toyota Motor Corp 
dropped 0.3 percent, Honda Motor Co gained 0.5 percent
and Sony Corp shed 0.2 percent.
    The weak yen trend paused, with the dollar trading at 102.49
yen, staying below a one-month high of 102.80 yen set
last Wednesday.
    The broader Topix gained 0.2 percent to 1,237.71,
while the new JPX-Nikkei Index 400 added 0.2 percent
to 11,273.38.

 (Editing by Richard Borsuk)
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