* Exporters under pressure as yen rises on QE expectations
* Komatsu, HCM extend gains on China infrastructure spending
* Tech firms hurt by Intel's disappointing earnings
By Sophie Knight
TOKYO, Sept 10 Japan's Nikkei average closed
flat on Monday, with losses from exporters hurt by a strong yen
cancelling out gains for China-related firms boosted by the
country's infrastructure drive.
Technology firms also came under pressure after Intel Corp
cut its third-quarter revenue estimate more than
expected on Friday due to declining demand for its chips as
customers reduce inventories and businesses buy fewer personal
Weaker-than-expected U.S. jobs data boosted expectations of
another round of quantitative-easing via bond purchases from the
Fed, which weighed on the dollar against the yen, hurting
Japanese exporters' competitiveness even though more stimulus
could help boost demand for their products. The Fed will hold
its policy meeting on Sept. 12-13.
"The benchmark isn't going to move much in either direction
while everyone is waiting for the Fed's decision, but the strong
yen is creating a heavy upside," said Yutaka Miura, senior
technical analyst at Mizuho Securities.
The Nikkei ended down 0.03 percent at 8,869.37 after
rallying 2.2 percent on Friday, its biggest one-day percentage
gain in five months, on the back of the European Central Bank's
plan to buy bonds of highly-indebted euro zone countries to
tackle the bloc's debt crisis.
Demand from investors for Nikkei call options has
outnumbered demand for put options.
Societe Generale analysts said in a note that the most
popular call options on the Nikkei with a September maturity had
a strike price at 9,000, or 1.5 percent above
Monday's close. The next most traded was a call at 9,250
, followed by a put at 8,750 and
another put at 8,500.
Exporters weighed down by a strong yen included Canon Inc
, Nissan Motor Co, Nikon Corp and TDK
Corp, down between 1.4 and 2.9 percent.
Chipmaker Tokyo Electron Ltd lost 3.3 percent and
Advantest Corp, a maker of chip-testing-devices,
dropped 4.4 percent on Intel's poor earnings.
But construction machinery makers Komatsu Ltd
advanced 3.2 percent and Hitachi Construction Machinery Co Ltd
gained 2.2 percent, extending sharp gains from Friday,
when China approved 60 infrastructure projects worth more than
$150 billion as it looks to energise an economy mired in its
worst slowdown in three years.
The Nikkei China 50, an index of 50 Japanese
companies with high exposure to China, outperformed the market
with a gain of 0.5 percent.
"The benchmark is linked to the Chinese stock market, which
is very weak at the moment. We would see big gains in Japan if
there was a rebound in China," said Mitsushige Akino, chief fund
manager at Ichiyoshi Investment Management.
The Nikkei is only up 4.9 percent so far this year,
compared with a 14.3 percent rise in the U.S. S&P 500 and
a 11.4 percent gain for the STOXX Europe 600.
"People are still worrying about a slowdown in the real
economy. Central bank policies are behind the curve. That kind
of concern is casting a shadow over the market," said Kyoya
Okazawa, head of equities and commodity derivatives at BNP
Paribas in Tokyo.
There are also worries that further easing from the Fed
could be negative for Japanese stocks as it would weaken the
dollar against the yen, adding more pressure to exporters.
However, some market players say that stimulus would also
improve sentiment, lessening investors' hunger for the "safe
haven" Japanese currency.
"QE3 would make the market very risk-on, which means a
softer yen -- whereas if the Fed decides not to do anything at
all, that would be bad for the Japanese market," said Akino of
Ichiyoshi Investment Management.
Market players say action from the Fed could also prompt the
Bank of Japan to ease further at its next policy meeting on
Sept. 18-19, possibly by expanding its budget for
exchange-traded funds to prop up the market.
Mitsubishi Paper Mills Ltd climbed 4.8 percent on
short-covering after the stock unexpectedly kept its place in
the Nikkei index during a review of the benchmark.
Mitsubishi Gas Chemical Co Inc, which was earlier
expected to be promoted to the benchmark, shed 2.7 percent after
failing to be included.
The broader Topix added 0.3 percent to 737.34 on
Monday. Trading volume was relatively light, at 89.4 percent of
its 90-day average.