* Nikkei falls 2 pct to a six-month low
* Sony drops below 1,000 yen for first time since 1984
* Canon underperforms after JPMorgan downgrade
By Dominic Lau
TOKYO, June 4 Japan's shares fell sharply in
early trade on Monday, with the Topix index falling to a
near three decades low, as disappointing U.S. jobs data added to
concerns over a slowing Chinese economy and a deepening euro
zone debt crisis.
The broader Topix index lost 2.1 percent to 694.42, a level
not seen since late 1983. Last week, it fell for the ninth
straight week, marking its longest such run since 1975.
The Nikkei dropped 2 percent to 8,271.07 to a
The Nikkei has fallen 19.3 percent since hitting a one-year
high on March 27 on concerns over a deepening euro zone debt
crisis and slowing global growth. If the benchmark were to drop
to around 8,200, it would technically enter bear market
"The investment sentiment is quite weak, so there's a
possibility of a further sell-off. The Nikkei can go down more,
that's a possibility," said Hisao Matsuura, equity strategist at
"From a valuation view point, it is attractive, and
investors almost seem to agree, but they don't want to buy now."
The Topix's 12-month forward price-to-earnings ratio has
fallen to 10.9, a level not seen since November 2008, data from
Thomson Reuters Datastream showed.
U.S. job growth braked sharply for a third straight month in
May and the unemployment rate rose for the first time in nearly
a year, raising the chance of further monetary stimulus from the
Federal Reserve to support the sputtering recovery.
"The U.S. employment was clearly disappointing ... This is
the new normal recovery type, less employment," said Shun
Maruyama, chief Japan equity strategist at BNP Paribas.
He said the market was likely to rebound in the near-term
led by short-covering ahead of the European Union summit on June
The Nikkei was in deep in "oversold" territory, with its
14-day relative strength index at 23. Thirty or below is deemed
The prospect of another round of stimulus by the U.S.
Federal Reserve weighed on the dollar against the yen, putting
added pressure on Japanese exporters, who are faced with weaker
global demand for their products.
Sony Corp, the maker of Walkman and Playstation,
eased 1.3 percent to 1,000 yen after falling below that level
for the first time since 1984 according to Reuters data.
Canon Inc dropped 3.7 percent to 2,938 yen,
breaking the 3,000 level for the first time since July 2009
after JPMorgan downgraded the camera and printer maker's rating
by two notches to "underweight" from "overweight".
Automakers Toyota Motor Corp, Nissan Motor Co
and Mazda Motor Corp shed between 3.1 and 7.3
Renesas Electronics Corp jumped 15.6 percent after
trouble chipmaker asked major shareholders - Mitsubishi Electric
Corp, Hitachi Ltd and NEC Corp - for
support of its restructuring plan.
Trading volume on the Topix after the halfway point was
relatively light, at 41.6 percent of its full daily average for
the past 90 days.
Taiyo Yuden also bucked the weak trend, up 2.3
percent after a trader said the electronics parts maker posted
surprisingly strong orders in May.