May 23, 2012 / 6:40 AM / 7 years ago

Japan's Nikkei falls to four-month closing low

* Exporters suffer as yen firms on BOJ policy doubt
    * TDK hurt by Seagate, Western Digital weakness
    * Investors lean on defensive stocks

    By Dominic Lau	
    TOKYO, May 23 (Reuters) - Japan's Nikkei share average shed
2 percent on Wednesday to a four-month closing low as exporters
took a beating on a firmer yen after the Bank of Japan's latest
statement raised doubt about its commitment to easing monetary
policy.	
    The BOJ dropped from its latest statement a line that the
central bank will pursue powerful monetary easing, saying
instead it will conduct appropriate policy, sending the yen
higher against the dollar.	
    Shares of exporters were further pressured by fears that
European leaders meeting later in the day would not be able to
agree on fresh steps to tackle the region's sovereign debt
crisis.	
    "This is very speculative selling led by futures. Most of
the investors are waiting for the EU summit today. There is no
active trading in the market, so it's futures selling by hedge
funds," said Takashi Hiroki, chief strategist at Monex Inc.	
    The Nikkei was down 172.69 points at 8,556.60,
erasing the 1.4 percent technical rebound over the past two
sessions since it suffered a 3 percent slide on Friday.    	
    If the Nikkei were to end the week lower it would be an
eighth straight week of losses, its longest such run since 1992.	
    The benchmark has fallen 16.6 percent since hitting a
one-year high on March 27 on concerns over a slowing global
growth and a deepening euro zone debt crisis.    	
    	
    Canon Inc, Nikon Corp and industrial robot
maker Fanuc Corp lost between 2.1 and 3 percent.	
    Automakers Nissan Motor Co, Honda Motor Co 
and Toyota Motor Corp were higher in the morning
session before the BOJ concluded its two-day meeting. They ended
the day down between 0.5 and 1.4 percent.	
    Mazda Motor Corp advanced 0.9 percent, however,
after a source said the loss-making automaker is in talks with
Italy's Fiat SpA to form a business tie-up as it seeks
a revival path after losing its strategic partnership with Ford
Motor Co. 	
    "The dollar sold off half a yen, which is a pretty big move
given the volatility. That's kind of telling you that the market
had some expectations out there," a senior trader at a European
bank said.	
    "If you look at the futures activity, the Nikkei trades a
lot worse than Topix. It kind of feels like someone is bashing
the Nikkei over the course of the day." 	
    The broader Topix index eased 1.6 percent to 721.57.	
    Investors retreated to defensive stocks, with Japan Tobacco
 up 1.9 percent, the biggest gain of the Topix Core 30
, and telecoms firm KDDI adding 1.1 percent.   	
    Nearly 1.92 billion shares changed hands, up from Tuesday's
1.52 billion but slightly lower than last week's average of 1.97
billion.       	
    TDK Corp shed 4.9 percent, hurt by overnight
weakness in peers Seagate Technology and Western Digital
Corp after an analyst report said hard-disk drive
inventory increased sharply week-on-week.	
    Nidec Corp, which makes small motors for HDDs,
lost 4.2 percent.	
    Social network gaming company DeNA Co Ltd also fell
sharply, down 4.5 percent after Credit Suisse downgraded its
rating to "neutral" from "outperform".
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