Nikkei flat as poor machinery data offsets Fed optimism

Wed Jul 9, 2014 9:43pm EDT

* Japanese machinery figures curb risk appetite
    * But expectations of global economic recovery support
sentiment
    * Benesse dives to 2-1/2-month low after data leak

    By Ayai Tomisawa
    TOKYO, July 10 (Reuters) - Japan's Nikkei share average was
flat on Thursday in choppy trade as worse-than-expected
machinery data soured sentiment after minutes from the U.S.
Federal Reserve suggested the end of its monetary stimulus was a
sign of economic strength.
    Japanese machinery orders posted their worst monthly fall on
record in May, defying expectations of a bounce and casting
doubt on hopes that capital spending was picking up and could
drive economic recovery. 
    The 19.5 percent month-on-month fall in core orders in May
from the previous month compared with a median estimate of a 0.7
percent gain in a Reuters poll of economists.
    The Nikkei was flat at 15,305.46 in mid-morning
trade after going back and forth between positive and negative
territory. It had dropped 0.1 percent to 15,302.65 on Wednesday,
its lowest closing level since June 30.
    Market players said the weak machinery orders curbed risk
appetite and there were doubts now about the April-June
forecast.
    "There had been optimism that companies' capital spending
was recovering, but it looks like we need to wait a few more
months to say that investment is actually rising," said Nobuhiko
Kuramochi, an analyst at Mizuho Securities. "Now it seems
difficult to achieve the April-June forecast."        
    Companies surveyed by the Cabinet Office forecast in May
that core orders would rise 0.4 percent in April-June from the
previous quarter, which would mark the fifth straight quarter of
gains. 
    But analysts also said there may not be a big sell-off in
the market because of expectations of a global economic
recovery.
    On Wednesday, Wall Street gained as the Fed's minutes
confirmed that its monthly bond purchases would probably end in
October and that it was near agreement on a plan to manage
interest rates in the future. 
    Exporters were mixed, with Toyota Motor Corp 
falling 0.5 percent, Sony Corp rising 0.1 percent and
Canon Inc shedding 0.8 percent.
    Sharply underperforming the market was education services
provider Benesse Holdings, which dived 6.4 percent to a
2-1/2-month low and was the eighth most traded stock by turnover
after it said a database on millions of customers has been
leaked.
    The broader Topix fell 0.3 percent to 1,266.80, and
the new JPX-Nikkei Index 400 dropped 0.3 percent to
11,516.52.

 (Editing by Alan Raybould)
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