Nikkei hits longest losing streak in 43 years

By Aiko Hayashi

TOKYO (Reuters) - The Nikkei average fell 1.3 percent on Wednesday to hit its longest losing streak in more than 40 years, as worries about the global economy hit exporters such as Canon Inc (7751.T).

Shipping firms extended losses after freight charges on the Baltic Dry Index dropped over 2 percent and on worries that high oil prices would hurt demand from emerging markets.

The benchmark Nikkei logged its 10th straight negative day, a period in which it has slid about 8 percent, its longest losing streak since February-March 1965.

"The worst factor for the market is oil prices that don't stop rising. Investors are in a complete wait-and-see stance," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

"Rather than directly damaging the Japanese economy, high oil prices hurt emerging economies and that will hit Japanese exports. The global economy will also obviously move downward," he said.

The Nikkei lost 176.83 points to end at 13,286.37, the lowest close since April 16.

The broader Topix shed 1.4 percent to 1,301.15, its lowest finish since April 17.

Oil rose more than $1 a barrel on Wednesday, within sight of Monday's record high above $143 on forecasts that global supply will lag demand.

Tokyo Stock Exchange President Atsushi Saito told the Reuters Japan Investment Summit in Tokyo on Wednesday that he finds the current market situation "terrifying".

"We are at a major crossroads where developed countries have to depend on funds of countries that explore and sell natural resources. It raises a question," Saito said. "I don't know the solution to this, but the market will likely be lost for a while."

Daiwa SB's Ogawa said he is not too concerned about the Nikkei's losing streak as it has fallen little by little and the overall performance is still not bad, and money is waiting once the market bottoms out.

"But it's hard for investors to return to stocks when the market falls slowly, rather than on a sell-off that marks a selling climax," he said.

EXPORTERS HIT

Exporters lost ground as the dollar slipped below 106 yen, as a stronger yen shrinks their overseas profits when they are brought back home.

Canon shed 2.6 percent to 5,200 yen, the biggest drag on the Nikkei 225, while Kyocera Corp (6971.T) fell 1.3 percent to 9,840 yen.