March 13, 2013 / 7:41 AM / 5 years ago

Nikkei slips for 2nd day as investors lock in profits from rally

* Exporters hurt as yen's weakening pauses
    * Warehouses buck market fall on monetary easing hopes
    * Foreigners continue to buy, supporting Japan stocks

    By Tomo Uetake
    TOKYO, March 13 (Reuters) - The Nikkei share average slipped
for a second day on Wednesday as investors took a firmer yen as
a cue to pocket profits in exporters like Panasonic Corp
 after an eight-session market rally.
    But expectations for further monetary easing by the Japanese
central bank kept losses in check, and shares of warehouse
operators and other expected beneficiaries from the government's
reflationary push managed to buck the downdraft.
    The Nikkei closed down 0.6 percent at 12,239.66,
after seesawing in and out of positive territory through the
day. The benchmark is down 1.8 percent from a 4-1/2 year high of
12,461.97 hit in early trade on Tuesday.
    The broader Topix shed 0.4 percent to 1,031.42.
    "The Nikkei is seeing a little correction," said Kenichi
Hirano, a strategist at Tachibana Securities. "When the index
moves away from its 25-day moving average by more than 5
percent, there usually is a technical adjustment."
    The Nikkei is now trading 5.5 percent above its 25-day
moving average of 11,596.94. Still, analysts said they did not
expect a deep correction, as the benchmark closed just a whisker
above support at its five-day moving average.
    The dollar fell 0.2 percent in Asia to 95.85 yen,
yielding to profit-taking after hitting a 3-1/2-year peak of
96.71 yen the previous day that had taken its year-to-date gains
to more than 10 percent. 
    The firmer yen weighed on shares of exporters including
Panasonic, which dropped 2.9 percent. Canon Inc fell
2.8 percent and Toyota Motor Corp lost 1 percent.
    But buying by overseas investors is expected to underpin the
market, helping to cushion selling by Japanese investors as they
await the start of the new financial year on April 1 to allocate
new funds, market participants said.
    "As the fiscal year-end nears, domestic investors sell to
adjust their positions. They will likely move to the sidelines
soon and they won't invest aggressively until new funds are
allocated in April," said Norihiro Fujito, a senior investment
strategist at Mitsubishi UFJ Morgan Stanley Securities. "But hot
money is pouring into the Japanese market as foreign investors
are buying."
    Before the opening bell, foreigners placed net buy orders
for Japanese stocks for a sixth straight day.
    
    UPWARD MOMENTUM
    Warehouse companies, which have large asset values and are
considered beneficiaries of Prime Minister Shinzo Abe's
reflationary policy, bucked the market fall on Wednesday.
Shibusawa Warehouse Co jumped 7 percent and Mitsui-Soko
Co surged 8 percent.
    "The market's upward momentum is still intact," said Hiroaki
Hiwada, a senior strategist at Toyo Securities. "Considering
major Japanese companies are promising to meet union demands for
bonuses, it looks like business sentiment is improving."
    Several large Japanese companies have said they will pay out
bigger bonuses this year, including Toyota, which declared its
largest bonus payout since the global financial
crisis. 
    Shares related to Boeing Co gained after the aircraft
maker won approval from U.S. transport regulators to start
testing a redesigned battery for the 787 Dreamliner, putting it
one step closer to getting the troubled airplane back into
regular service. 
    GS Yuasa Corp, the battery maker for the
Dreamliner, rose 0.7 percent. All Nippon Airways Co Ltd 
and Japan Airlines Co Ltd, which both own Dreamliners,
advanced 1.5 percent and 1.7 percent, respectively.
    Elsewhere, Nikon Corp rose 3.2 percent after the
Nikkei newspaper said that the camera maker was planning to
reduce inventory by 20 percent from December levels by March 31,
by re-examining its marketing strategy and streamlining output.
    The Nikkei average has gained 17.7 percent this year and 5.9
percent this month, as likely higher overseas income for
exporters on the back of the weakening yen and hopes for more
monetary easing have encouraged investors to buy equities.

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