April 2, 2013 / 1:20 AM / in 5 years

Nikkei sheds 1.8 pct, drops below 12,000 for 1st time in 3 weeks

* Tops sheds 1.4 pct to trade below 1,000
    * Exporters suffer after weak U.S. factory data
    * Real estate firms gain ahead of BOJ meeting this week

    By Dominic Lau
    TOKYO, April 2 (Reuters) - Japan's Nikkei stock average
dropped 1.8 percent to below the 12,000-mark for the first time
in three weeks, with exporters like Canon taking a beating after
weak U.S. factory data raised concerns about the recovery of the
world's biggest economy.
    The Nikkei was down 213.87 points at 11,921.15 in
midmorning trade, breaking below its 25-day moving average of
12,126.59 and extending the previous session's 2.1 percent
    "People have plenty of profits to take. There are very few
shorts out there in the market, so it ... creates a rather nasty
fall," a senior dealer at a foreign bank said.
    The benchmark Nikkei rallied 19.3 percent in January-March,
its best quarterly performance in nearly four years, after Prime
Minister Shinzo Abe embarked on expansionary fiscal and monetary
policies to revive the economy. The Bank of Japan is expected to
announce further monetary easing steps after it concludes a
two-day meeting on April 4.
    "You have got people, who have been away for Easter, come
back to start selling. We are sellers here today but not
enormously. People are taking profit, frightened by the yen,"
the senior dealer said.
    The yen rose to a one-month high of 92.96 to the dollar on
Tuesday, rebounding from a 3-1/2-year low of 96.71 yen touched
on March 12, after U.S. factory activity grew at the slowest
pace in three months in March. 
    The weak Institute for Supply Management data suggested the
U.S. economy was losing some momentum at the end of the first
quarter as the effects of a tighter fiscal policy kicked in.
    Exporters, which have rallied in recent months on the back
of the yen's weakness, bore the brunt of the selling on Tuesday.
    Canon Inc, Toyota Motor Corp, Honda Motor
Co, TDK Corp and semiconductor equipment maker
Tokyo Electron lost between 1.6 and 3.8 percent.
    "The first-quarter performance was quite good, so investors
want to take profit ... I am not worried about it too much,"
said Hisao Matsuura, an equity strategist at Nomura Securities.
"I think the Nikkei can go down another 2 to 3 percent from
    He said he expected the Nikkei to test 13,000 by the end of
June as the economy was likely to improve while the BOJ would
keep its stimulus tap open.
    The broader Topix index shed 1.4 percent to 986.04,
falling below the 1,000-mark for the first time in nearly four
weeks. The Topix sank 3.3 percent on Monday, its biggest one-day
percentage fall in two years.
    Engineering firm JGC Corp was a rare gainer,
jumping 6 percent, after a consortium of France's Technip
 and JGC won a tender to build a liquefied natural gas
plant on Russia's Yamal peninsula.
    Real estate and financial companies, which benefit from the
government's drive to reflate the economy, also fared well.
Mitsubishi UFJ Financial Group rose 0.2 percent and
property firm Mitsui Fudosan added 3 percent.
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