Nikkei flat as market runs out of steam, Toshiba up

By Elaine Lies

TOKYO (Reuters) - Japanese stocks were nearly flat on Monday as the market ran out of steam in late trade, with gains in JFE Holdings (5411.T: Quote, Profile, Research) and other steelmakers offset by falls in insurers on concerns over widening subprime losses.

Shares in Aioi Insurance Co (8761.T: Quote, Profile, Research) fell 6.8 percent after the Yomiuri newspaper said its subprime-related losses were now expected to balloon to more than 80 billion yen in the current business year to March.

The standout for the day was Toshiba Corp (6502.T: Quote, Profile, Research), which jumped after a company source told Reuters at the weekend that it planned to give up on its HD DVD format for high-definition video, leaving the field to Sony Corp's (6758.T: Quote, Profile, Research) rival Blu-ray system.

Market players generally welcomed the move, sending Toshiba shares up by more than 6 percent at one point.

"They made a clear decision, and this was recognized by the market," said Takeshi Osawa, senior fund manager at Norinchukin Zenkyoren Asset Management.

But an absence of strong buying factors with Wall Street closed for a holiday caused the market to fall back in later trade, with slides in Hong Kong and Bombay shares also providing downward pressure on the overall market.

MSCI's measure of Asia Pacific stocks excluding Japan .MIAPJ0000PUS was down 0.3 percent as of 1:27 a.m. EST.

The benchmark Nikkei average .N225 ended up 0.09 percent at 13,635.40 after earlier rising more than 1 percent. The broader TOPIX index was down 0.1 percent after also gaining more than 1 percent.