Nikkei drops 1 percent after U.S. jobs
TOKYO (Reuters) - Japan's Nikkei stock average fell 1 percent on Friday after bleak U.S. jobs data revived caution about the outlook for the global economy, while retail stocks tumbled after Seven & I Holdings reported a drop in quarterly profit.
Shares of oil and gas field developer Inpex and other oil-related shares dropped after crude oil prices fell nearly 4 percent on Thursday.
Drugmaker Eisai Co Ltd fell after Nikko Citigroup downgraded the stock, citing the fact that the company's Aricept Alzheimer's drug will not receive approval from the U.S. Food and Drug Administration for pediatric use and will not get a six-month extension from the patent expiry date.
Tokyo shares fell after U.S. stocks slid the previous day but trade was thin, with 942 million shares traded on the Tokyo exchange's first section compared with last week's morning average of 1 billion.
The Nikkei's fall was limited compared with Thursday's 2.9 percent drop in the Standard & Poor's 500 index, which came in light trade ahead of a long weekend in the United States.
The holiday-shortened week likely helped to exaggerated the drop in U.S. shares and that may be a factor behind the divergence, said Nagayuki Yamagishi, investment strategist at Mitsubishi UFJ Securities.
"Since they had been rising recently, you would usually expect buying to emerge on dips. But with the weekend looming, people may have decided to wait to see what happens in Japan and Europe," Yamagishi said, referring to U.S. shares.
"If people look at the moves in Tokyo shares and were to take the view that they held pretty firm, the moves might reverse at the start of next week," he added.
U.S. financial markets will be closed on Friday for the U.S. Independence Day holiday, with July 4th falling on a Saturday this year.
The Nikkei was down 101.32 points at 9,774.83 at midday, having slipped below the 25-day moving average, which now lies at 9,816.
The 25-day moving average has acted as support for the Nikkei over the course of its rally since March.
The broader Topix dropped 0.8 percent to 916.51.
Declining shares outnumbered advancing shares by more than 3 to 1 on the Tokyo exchange's first section.
The U.S. Labor Department reported on Thursday that U.S. employers cut 467,000 jobs in June, 100,000 more than Wall Street economists had expected. The unemployment rate hit 9.5 percent, the highest in nearly 26 years.
With the Nikkei having climbed nearly 40 percent from its troughs hit in March, market analysts have said Tokyo shares were due for a pull-back, with corporate earnings due this month seen as key for the market's direction. Continued...
