Japan stocks fall as more companies cut outlook

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By Taiga Uranaka

TOKYO, Feb 7 (Reuters) - Japanese stocks fell on Thursday as more companies lowered their earnings outlook, adding to bearish investor sentiment amid jitters over the U.S. economy.

Banks such as Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) were also under pressure after U.S. Federal Reserve officials cast doubt on whether there will be more interest rate cuts.

Electronic parts maker Taiyo Yuden Co Ltd (6976.T: Quote, Profile, Research, Stock Buzz) joined a growing list of the companies that slashed their forecasts, prompting its shares to tumble 7.7 percent.

"Japanese shares are very cheap in terms of valuation and other measures, but the market doesn't see it that way unless it is convinced of a good corporate earnings outlook," said Kenichi Hirano, operating officer at Tachibana Securities.

In a sign of further troubles, Masayoshi Okamoto, head of dealing at Jujiya Securities, said a growing number of companies cut their outlook for other reasons besides weak U.S. sales.

"That means even if the U.S. economy recovers, other problems remain for Japanese companies," he said.

The benchmark Nikkei average .N225 ended the morning session down 0.8 percent at 12,995.03. The broader TOPIX index was 1.3 percent lower at 1,282.11.