* Yamada Denki boosted by report to up stake in Best Denki
* Asahi Glass sinks, cuts profit forecast on weak demand
* Pharmaceuticals in favour, driven by Shionogi drug trial
By Sophie Knight
TOKYO, July 12 Japan's Nikkei share average
inched down in early trade on Thursday ahead of the outcome of a
Bank of Japan policy meeting, with the central bank expected to
hold off on further policy easing despite slowing global growth.
Pharmaceuticals and other defensives led a handful of
advancers as the week's "risk off" mode prevailed on hints from
the U.S. Federal Reserve's June meeting that an imminent easing
for the world's largest economy is off the cards.
The Nikkei fell 0.4 percent to 8,817.18, while the
broader Topix index lost 0.5 percent to 737.85, with
trading thin ahead of the BOJ announcement expected around
"Expectations are divided between those that think the BOJ
is going to do nothing and those that think they'll do the bare
minimum, but no-one is expecting a big move," said Kenichi
Hirano, operating officer at Tachibana Securities.
"The recent tankan and economic review suggest there's not
really a big enough sense of crisis for a big policy shift."
The BOJ's tankan survey, released last week, showed improved
sentiment among Japanese businesses, while its economic review
was unexpectedly positive.
However, others suggested political factors could force the
BOJ to ease further by expanding its budget for exchange-traded
funds and real-estate investment trusts, or by buying bonds with
"The fundamentals definitely don't warrant easing, but if
the BOJ don't ease at least once every three months they come
under a lot of of political pressure," said Norihiro Fujito,
senior investment strategist at Mitsubishi UFJ Morgan Stanley.
"On the other hand there's a possibility the government are too
busy with (Ichiro) Ozawa's new party to bother the BOJ."
Japanese political veteran Ichiro Ozawa recently split from
the ruling Democratic Party of Japan over a bill to double the
consumption tax rate to 10 percent by 2014, forming his own
While a sense of crisis about the euro zone debt woes has
sufficiently receded for the Bank of Japan to hold fire on
easing for now, investors are still concerned about a global
slowdown as companies warn that the upcoming earnings season
will see revenues below par.
Asahi Glass Co Ltd fell 6.8 percent, hitting an
almost 3-1/2 year low after the company cut its annual operating
profit forecast due to weakening demand in Europe.
Major exporters underperformed, with Mazda Motor Co
dropping 2.1 percent and construction machinery maker Komatsu
Ltd losing 2.3 percent.
Pharmaceuticals saw gains, however, with the sector rising
0.8 percent as the best-performing subindex of the Topix index.
Shionogi & Co Ltd rose 4.3 percent after one of its
experimental AIDS drugs developed with partner GlaxoSmithKline
proved better than rival Gilead's market-leading
Atripla in a late-stage clinical trial.
Japan's largest consumer electronics retailer Yamada Denki
put on 1.5 percent after the Nikkei business daily
reported it will increase its stake in smaller rival Best Denki
by over 50 percent for more than 10 billion yen ($126
million). Best Denki soared 11 percent.