February 7, 2013 / 2:15 AM / 5 years ago

Nikkei slips off 4-yr high on pause in yen's fall, Nikon slumps 19 pct

* Nikon nosedives on sharp profit outlook cut
    * Mazda and Fuji Heavy attractive - trader

    By Ayai Tomisawa
    TOKYO, Feb 7 (Reuters) - Japan's Nikkei share average
retreated on Thursday from a more than four-year high hit a day
earlier as a pause in the yen's decline and caution ahead of a
European Central Bank meeting gave investors reason to take
profits on export-driven firms. 
    The Nikkei average shed 0.9 percent to 11,361.05,
retreating from the high of 11,498.42 struck on Wednesday.   
The yen, which fell to a 33-month low of 94.08 to the dollar 
on Wednesday, last traded at 93.39. 
    Nikon Corp plummetted 19 percent to a daily limit
of 2,139 yen and its lowest level in more than two months, as
its sharp cut in its outlook disappointed investors who had
chased the stock higher over the past three months.
    The stock was the biggest loser on board in percentage terms
and dragged down the precision machinery sector,
which lost 5.5 percent.
    The camera maker, whose shares had climbed 45 percent since
mid-November when Prime Minister Shinzo Abe calls for aggressive
monetary easing put the yen on a long slide, slashed its
operating profit forecast by a third, citing sluggish sales of
interchangeable-lens cameras due to increased competition.
    "Nikon's sharp cut in its outlook startled us... I'm not
surprised if investors are dumping the stock immediately and
even shorting it as there are better stocks to buy," said
Mitsushige Akino, chief fund manager at Ichiyoshi Asset
    Akino regarded exporters as Mazda Motor Corp and
Fuji Heavy Industries Ltd as attractive due to their
bright earnings.
    Mazda Motor rose 7.8 percent after the carmaker raised its
operating profit forecast for the year ending March 31 by 80
percent to 45 billion yen ($482 million), which would be its
highest since the year ended March 2008. 
    Shares of Mazda, which exports about 80 percent of its cars,
were the most-traded by turnover on the main board.
    Fuji Heavy, which makes Subaru cars and is seeing strong
sales in the United States,its biggest market, was 2.4 percent
higher after raising its operating profit outlook by 25 billion
yen to a record 107 billion yen.
    Market strategists said a correction is natural after recent
sharp gains in the Japanese market, but it was likely to 
rise in the mid-to-long term on hopes for aggressive monetary 
    Investors were expected to take a wait-and-see approach
ahead of a meeting of European Central Bank policymakers later
on Thursday that could impact the currency market.
    "Hopes for 'Abenomics' are supporting the mood, but 
investors are also sensitive to the currency moves, so right 
now, even small uncertainty on Europe can be a reason to pull 
back," said Hiroichi Nishi, an assistant general manager at SMBC
Nikko Securities.
    Bank of Japan Governor Masaaki Shirakawa on Tuesday said he 
would step down, together with his two deputies, three weeks 
before the end of his five-year term in April.  
    Prime Minister Shinzo Abe has put the central bank under 
relentless pressure to do more to pull the economy out of the 
doldrums. He has made it clear that he wants a governor who will
be bolder in loosening monetary policy. 
    The broader Topix was flat at 968.76.
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