April 18, 2013 / 6:45 AM / 4 years ago

Nikkei falls 1.2 pct, hurt by Apple component suppliers

5 Min Read

* Exporters also come under pressure
    * Game sector in demand, GungHo jumps 9.4 pct
    * Foreign investors' net buying in Japan stocks jumps last
week

    By Dominic Lau
    TOKYO, April 18 (Reuters) - Japan's Nikkei share average
dropped 1.2 percent on Thursday as Apple-linked shares came
under pressure on concerns of slowing sales of the iPhone
maker's products, while global growth worries dampened the
appeal of exporters.
    Apple Inc's suppliers in Japan took a battering
after the U.S. tech company's stock tumbled 5.5 percent in New
York as a key supplier, chipmaker Cirrus Logic, gave a
disappointing revenue forecast, fuelling worries about weakening
demand for the iPhone and iPad. 
    Toshiba Corp, Murata Manufacturing Co Ltd
, Ibiden Co Ltd and Rohm Co Ltd 
dropped between 2.1 and 3.7 percent.
    Industrial robot maker Fanuc Corp, whose clients
include Taiwan's Hon Hai Precision Industry, Apple's
main contract manufacturer, eased 2.3 percent and was the
second-weighted loser.
    The Nikkei ended 162.82 points lower at 13,220.07,
breaking below its five-day moving average of 13,317.04.
    Blue-chip exporters also faltered, with Toyota Motor Corp
 off 2.2 percent and Honda Motor Co down 1.3
percent.
    A senior trader at a foreign bank in Tokyo said investors
continued to sell financials, which have surged in the past few
months on expectations of aggressive monetary easing by the Bank
of Japan. Nomura Holdings, Japan's top brokerage, eased
1.2 percent and lender Mitsubishi UFJ Financial Group 
slipped 0.8 percent.
    The central bank on April 4 stunned financial markets by
announcing a sweeping monetary expansion programme aimed at
breaking a deflationary cycle and ending two decades of
stagnation, promising to inject $1.4 trillion into the world's
third-largest economy in less than two years.
    One sector getting a lot of attention recently is gaming, 
said a senior trader. "We see a lot of two-way flow ...  I think
it is really speculative," he said of the price jumps in the
sector.
    Game developer GungHo Online Entertainment Inc 
jumped 9.4 percent, extending this week's gain on news that its
popular mobile game, Puzzles & Dragons, will be available on
Nintendo's handheld 3DS device.
    Social gaming firms Gree Inc and DeNA Co Ltd
 climbed 7.7 and 2.3 percent respectively.
    The broader Topix index dropped 1.2 percent to
1,122.97, with 4.37 billion shares changing hands, up from
Wednesday's 3.8 billion.
    
    FOREIGN INFLOW
    The benchmark Nikkei has rallied more than 50 percent and
the yen has weakened more than 20 percent against the dollar
since mid-November, when Shinzo Abe, who became Prime Minister
in December, promised bold expansionary monetary and fiscal
policies during his election campaign.
    During that period, foreign investors have ploughed 8.22
trillion yen ($84 billion) into Japanese equities.
    Their net buying of Japanese stocks hit the highest last
week since the Ministry of Finance started collecting data in
2005, buoyed by the BOJ's massive stimulus steps unveiled on
April 4.
    The investors bought 1.57 trillion yen worth of Japanese
shares in the week through April 13, piping the previous record
of 1.12 trillion in the week of March 3 to 9.
    "Fund managers are still underweight -- and the experience
from past periods in which foreigners started favouring Japan
suggests that, although foreign buying has started to
accelerate, it should have further to go," Credit Suisse wrote
in a note this week.
    "The rate of net foreign buying can remain at current levels
for a long period."
    Societe Generale recommended investors go long Japanese
shares, through hedging against currency risk, and short China,
Korea and Taiwan.
    "Competitive positions are changing fast in Asia. In effect,
Korea, Taiwan and China are losing competitiveness while Japan
regains it," its strategists wrote in a note.
    They proposed long automakers, real estate, technology
hardware makers and transport firms as they will be the most to 
benefit from a weaker yen, and recommended going short media,
utilities and household goods firms.

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