* Financials take breather after recent strong gains
* Bounce in yen hurts exporters
* Investors cautious on Fed's tapering timeline - analyst
By Ayai Tomisawa
TOKYO, Nov 19 Japan's Nikkei share average
stepped back from six-month highs on Tuesday morning, with a
bounce in the yen denting exporters while financials retreated
after their recent earnings-led rally.
The Nikkei dropped 0.5 percent to 15,082.35 in
mid-morning trade, moving away from 15,273.61 hit on the
previous day, the highest since May 23 when it reached a 5-1/2
year high of 15,942.60.
The broader Topix shed 0.5 percent to 1,236.06.
"Investors have started becoming risk on, but the market has
risen too fast so they are staying cautious until there are more
cues about Fed's tapering," said Takuya Takahashi, a strategist
at Daiwa Securities.
Markets continue to watch out for any clues as to when the
U.S. Federal Reserve will start unwinding its $85
billion-a-month stimulus programme, although many in the markets
now see any move unlikely until March.
Financials lost ground after rising on Monday on their
recent strong earnings. Sumitomo Mitsui Financial Group
shed 1.7 percent, while Mitsubishi UFJ Financial Group
declined 0.9 percent and Mizuho Financial Group slid
Exporters were weaker after the dollar pulled back against
the yen, reflecting expectations the Fed will maintain its
easy-money policy for a while longer after dovish comments last
week from incoming Fed chief Janet Yellen.
Toyota Motor Corp dropped 0.5 percent and Advantest
Corp fell 1.7 percent.
The yen was up 0.1 percent at 99.925 yen to the dollar
, adding to a 0.2 percent rise overnight to end a two-day
run of losses.
Last week, the yen hit a two-month low of 100.315 yen to the
dollar, driven by a risk-on mode in global markets and comments
from Finance Minister Taro Aso that Tokyo should retain currency
intervention as a policy tool. The Nikkei gained 7.7 percent
last week, it's biggest weekly rise in four years.
A weaker yen sharpens Japanese exporters' competitiveness
overseas and bumps up their dollar earnings when repatriated.
The Nikkei has rallied 45 percent this year, driven by the
government's expansionary fiscal and monetary policies.