Nikkei drops two percent

The Nikkei share average slid 2 percent on Friday after sharp gains this week, as investors sold exporters such as Toyota Motor Corp on concerns about the health of the US economy and a stronger yen.
Industrial robot maker Fanuc Ltd tumbled over 7 percent after a brokerage warned about its second-quarter profits, while Canon Inc dropped after posting a 12 percent fall in quarterly profit due to sluggish copier demand and a stronger yen. Mizuho Financial Group and other bank shares, which tend to move in tandem with US peers, also fell after weak housing data renewed worries about the state of the US economy and hit financial stocks there.
"Japan lives on exports and there's no way it can avoid being affected by a slowdown in overseas economies," said Takahiko Murai, general manager of equities at Nozomi Securities. "America is really close to a recession. If housing sales sag, consumption will slow and car sales will obviously go down," he said.
The data from the National Association of Realtors showed on Thursday that sales of existing homes in the United States hit a 10-year low in June. The benchmark Nikkei shed 268.55 points to end at 13,334.76, while the broader Topix fell 2.6 percent to 1,298.28.
The Nikkei snapped a three-day winning streak in which it had gained about 6 percent, but for the holiday-shortened week, it booked a 4.2 percent gain, its best one-week rise in five months. Toyota slid 3.5 percent to 4,940 yen and Honda Motor Co Ltd shed 2.1 percent to 3,760 yen. Sony Corp declined 4.2 percent to 4,360 yen. Shares of Canon sank 4.9 percent to 5,100 yen.
Fanuc dropped 7.2 percent to 9,350 yen to become the top drag on the Nikkei 225. UBS warned the industrial robot maker's profits may fall in the second quarter, though the company had operating profit growth of 4.5 percent in the first quarter.
"Profit growth was thus maintained, but the rate of growth is flattening rapidly alongside the global economic slowdown," UBS analysts Hidehiko Hoshino and Satomi Yamazaki wrote in a note to clients. Mizuho, Japan's second-biggest bank, tumbled 8.2 percent to 530,000 yen. Top lender Mitsubishi UFJ Financial Group shed 5.4 percent to 976 yen and No 3 bank Sumitomo Mitsui Financial Group lost 5.8 percent to 840,000.
But Japan's top two shipping firms, Nippon Yusen KK and Mitsui O.S.K. Lines rose after they booked solid gains in quarterly profit on the back of strong demand for bulk shipping of commodities, and Mitsui O.S.K. lifted its full year forecast by 7 percent.
Shares of Nippon Yusen climbed 1.1 percent to 938 yen and Mitsui O.S.K. added 0.1 percent to 1,468 yen. Trade slowed on the Tokyo exchange's first section, with 1.77 billion shares changing hands, compared with last week's daily average of 1.85 billion. Declining stocks outpaced advancing ones by a ratio of more than 5 to 1.