* Nikkei flat, Topix down 0.1 pct
* Argentine's default, Portugal bank woe hit financials
despite limited exposure
* U.S. job creation slows, unemployment rate rises
* Heavyweight SoftBank tumbles on Iliad's T-mobile bid
* Hopes for domestic earnings lend some support
By Tomo Uetake
TOKYO, Aug 4 Japanese stocks were flat on Monday
after slipping to a one-week low in choppy early trade, as more
losses on Wall Street and the conflict in Gaza and Ukraine
sapped risk appetite.
Heavyweight SoftBank Corp extended its losses,
tumbling 3.4 percent and was the most-traded stock by turnover
on the main board at the morning break.
The stock has come under pressure after French
telecommunications company Iliad SA made a surprise
offer for T-Mobile US Inc last week, setting up a
potential bidding war with Sprint Corp, the U.S. mobile
carrier now controlled by Softbank..
The benchmark Nikkei dropped for a third straight
day on Monday to as low as 15,440.21 - its weakest level since
July 28 - before erasing much of the losses to stand flat at
U.S. stocks ended lower on Friday, with the S&P 500
posting its biggest weekly decline in two years, led by losses
in financial shares on persistent concerns over
Argentina's debt default and problems at the biggest bank in
"The fact that U.S. financial shares fell sharply even
though they have very limited exposure to Argentine and Portugal
suggests just how markets are getting nervous about high
valuations," said Yasuo Sakuma, portfolio manager at Bayview
Japanese financial shares followed suit, with securities
and banking leading the top three
decliners on the Topix subindexes, each losing 1.1 percent.
Mitsubishi UFJ Financial Group fell 1.7 percent
while Nomura Holdings dropped 1.3 percent.
Tensions in the Middle East and Ukraine also offset some
helpful U.S. rate implications for equities from Friday's U.S.
U.S. job growth came in slightly below consensus and slowed
in July, while the unemployment rate unexpectedly rose, pointing
to slack in the labour market that could give the Federal
Reserve room to keep interest rates low for a while.
Still, underlying hopes of an improvement in domestic
corporate earnings continued to support Japanese equities.
The April-June quarter earnings season, which has been in
full swing for a few weeks now, has largely provided encouraging
reading on Corporate Japan's health.
"We have passed the peak of earnings season. It is becoming
increasingly clear earnings forecasts were too timid - and
valuations too low," CLSA Japan strategist Nicholas Smith wrote
in a research note on Friday.
That sentiment was echoed by Astellas Pharma Inc
and Rohm Co Ltd, which climbed 3.3 percent and 6.3
percent respectively, after posting solid earnings.
The broader Topix shed 0.1 percent to 1,280.60,
while the JPX-Nikkei Index 400 ended the morning
session almost flat at 11,658.33.
(Editing by Shri Navaratnam)