* Investors quick to take profits on gains after BOJ action
* BOJ outcome generally welcome - analyst
* Investor attention will shift to Oct-Dec earnings -trader
By Ayai Tomisawa
TOKYO, Jan 22 The Nikkei share average ended
lower on Tuesday in volatile trade, erasing gains scored
immediately after the Bank of Japan set a 2 percent inflation
target and made an open-ended commitment to buy assets but
delayed action on that pledge until next year.
The Nikkei shed 0.4 percent to end at 10,709.93
after rising as much as 1 percent following the BOJ
announcement. It retreated for a second day in a row from
Friday's nearly three-year closing high of 10,913.30.
The central bank has been under relentless pressure from new
Prime Minister Shinzo Abe for aggressive action to overcome
deflation and had been widely expected to double its inflation
target to 2 percent, although the open-ended asset buying pledge
took some market players by surprise.
Abe's calls for bold BOJ easing, dating back to mid-November
when he was the leading candidate to win a general election,
have helped to weaken the yen, in turn boosting exporters and
sparking a 26 percent rally in the Nikkei.
Analysts said that a correction has kicked in and may
continue for the time being with the BOJ's policy announcement
out of the way.
"The BOJ's decisions were generally welcomed by the market.
It's a big step toward," said Yoshito Sakakibara, vice president
of investment research at JPMorgan Asset Management.
"But for today, some investors focused on the timing of
open-ended asset buying, which won't start until 2014."
FOCUS ON FUNDAMENTALS
Right after the BOJ's decision, the dollar rose as high as
90.18 yen, nearing a 2-1/2 year high of 90.25 yen that
was set on Monday. But the dollar later sagged back and was last
fetching 89.28 yen.
Exporters succumbed to profit-taking, with Toyota Motor Corp
falling 0.9 percent, Honda Motor Co dropping
2.3 percent and Canon Inc sliding 1.7 percent.
Gainers included Olympus Corp, up 6.6 percent after
it submitted to the Tokyo Stock Exchange a written affirmation
on its internal control systems which, if approved, will see the
camera maker's "securities on alert" status lifted. It was
placed on that status following an accounting scandal that broke
in late 2011.
UBS Securities started coverage of Olympus with a "buy"
rating and a target price of 3,000 yen.
Toshiba Corp rose 0.8 percent after J.P. Morgan
raised its rating to "overweight" from "underweight", citing
expectations of strong earnings on a softer yen.
The market will be scrutinising quarterly earnings
announcements over the next few weeks, with recent gains in
bellwether stocks such as autos and technology not yet backed up
sufficiently by improvements in fundamentals, traders said.
"Now that the major event is over, investors' attention will
shift to earnings announcements for the third quarter, and the
consensus is that most companies will report poor results," said
Makoto Kikuchi, chief executive of Myojo Asset Management.
The transport equipment sector has risen 37
percent since mid-November and the electronics machinery sector
has gained 29 percent.
"I expect to see some corrections especially in tech shares
... The earnings will be a wake up call to remind investors that
the valuations after these rises are not justified," Kikuchi
On Tuesday, The broader Topix slipped 0.4 percent to
901.15 in active trade, with 3.92 billion shares changing hands,
up from last week's average daily volume of 3.73 billion shares.