Nikkei falls 1.5 pct, caution rules ahead of data

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By Taiga Uranaka

TOKYO, March 31 (Reuters) - Japan's Nikkei average fell 1.5 percent on Monday, with investors locking in profits following last week's sharp gains and before a raft of key economic data.

Financial shares were under selling pressure, with Japan's third-largest bank Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) down 3.1 percent, after their U.S. peers fell on concerns about potential dividend cuts.

Trading house Marubeni Corp (8002.T: Quote, Profile, Research, Stock Buzz) plunged more than 6 percent after Lehman Brothers LEH.N said it planned to sue Marubeni for repayment over a case of suspected fraud. [ID:nSP279128]

"Friday's gain was simply dressing, so it would be naturally followed by profit-taking," said Fumiyuki Nakanishi, group manager of investment research department at SMBC Friend Securities.

He was referring to institutional investors' buying to boost the value of their portfolios before Japan's fiscal year wraps up on Monday.

Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) fell 3.6 percent to 5,050 yen, becoming one of the top drags on the Nikkei after a 2.5 percent gain on Friday.

"Investors found it hard to make moves following falls on Wall Street and ahead of (the Bank of Japan's) tankan and employment data," said Noritsugu Hirakawa, strategist at Okasan Securities.