May 21, 2014 / 1:25 AM / in 4 years

Nikkei falls as BOJ awaited; construction equipment makers hit by Caterpillar

* Komatsu, Hitachi Construction fall as Caterpillar suggests
weak demand
    * BOJ comments in focus after policy meeting

    By Ayai Tomisawa
    TOKYO, May 21 (Reuters) - Japan's Nikkei share average edged
down on Wednesday morning as a stronger yen soured sentiment,
and construction equipment makers underperformed after
Caterpillar reported lower demand in heavy machines.
    Investors are watching out for comments by the Bank of Japan
after it ends its two-day policy setting meeting on Wednesday. 
    The BOJ is set to keep monetary policy steady, and Governor
Haruhiko Kuroda is also expected to reiterate his optimism that
Japan is on course to meet the bank's 2 percent inflation target
about a year from now. 
    The Nikkei dropped 0.3 percent to 14,031.66 in
mid-morning trade, after rising 0.5 percent to 14,075.25 on
    "The market is already jittery about the falling U.S. bond
yields leading to a weak dollar-yen. Kuroda's comment dismissing
the possibility of further easing again won't do any good to the
mood," said Hiromichi Tamura, chief strategist at Nomura
    Komatsu Ltd tumbled 3.3 percent, and Hitachi
Construction Machinery Co shed 2.4 percent after
Caterpillar said retail statistics for the three-month rolling
period ending in April were down 13 percent. 
    Exporters also lost ground as the dollar dipped 0.1 percent
to 101.25 yen on falling U.S. yields, within striking
distance of 101.10 hit on Monday, its lowest since Feb. 5.
    Toyota Motor Corp dropped 0.9 percent, Sony Corp
 shed 1.2 percent and Tokyo Electron Ltd fell
1.6 percent.
    The broader Topix dropped 0.3 percent to 1,149.96,
while the new JPX-Nikkei Index 400 fell 0.3 percent
to 10,492.22.


 (Editing by Shri Navaratnam)
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