Japan's Nikkei average lost 0.2 percent on Wednesday, hit by profit-taking after five days of gains, with exporters such as Canon Inc pressured by a stronger yen. Bank shares such as Mizuho Financial Group slipped after their US peers fell ahead of earnings reports from several major banks this week, with J.P. Morgan Chase reporting on Wednesday and Goldman Sachs on Thursday.
Market players said profit-taking emerged after the benchmark rose for five straight days, during which it gained 4.2 percent, though buying of so-called defensive shares kept losses in check. "It's really hard to buy today, with many investors reluctant to try and break above the 25-day moving average - now at around 10,140 - especially given the yen's gains against the dollar," said Noritsugu Hirakawa, a strategist at Okasan Securities.
"We really need to see what happens on Wall Street, with investors wanting to confirm the financial earnings results before there's any incentive to buy." The benchmark Nikkei lost 16.35 points to 10,060.21, while the broader Topix lost 0.8 percent to 894.34. The dollar slid to its weakest level in 14 months against a basket of currencies and fell below 89 yen after sell orders were triggered near 89.60-50 yen per dollar and a Japanese official told Reuters dollar weakness was likely to persist.
The greenback was down 0.8 percent at 88.95 yen by late afternoon. Canon lost 1.1 percent to 3,460 yen, while Honda Motor Co fell 1.8 percent to 2,760 yen and Toyota Motor Corp shed 1.1 percent to 3,570 yen. Chip equipment makers weighed on the market through much of the day after Intel's quarterly outlook and results beat expectations, but the company said it expected its 2009 capital spending to be around $4.5 billion, down from its previous expectation of around $4.7 billion.
Tokyo Electron dipped 0.5 percent to 5,740 yen, while Nikon Corp fell 0.7 percent to 1,724 yen and Disco Corp slid 1.3 percent to 5,950 yen. Market players said falls in tech shares appeared to also be due to profit-taking after gains made the previous day on hopes for Intel's earnings and after a recent rally. "Overall, the sense of recovery in the industry remains, and this will provide fundamental support," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
Japan's No 2 bank Mizuho Financial Group shed 4.8 percent to 177 yen, while Mitsubishi UFJ Financial Group lost 3.2 percent to 485 yen. Sumitomo Mitsui Financial Group gave up 4.7 percent to 3,270 yen. Defensive shares such as drugmakers gained, with Chugai Pharmaceutical Co rising 0.4 percent to 1,764 yen and Eisai Co climbing 1.2 percent to 3,300 yen.
Kao Corp, Japan's largest maker of toiletries, rose 3.8 percent to 2,185 yen, while Japan Tobacco Inc gained 1.9 percent to 272,400 yen. Trade was moderate on the Tokyo exchange's first section, with 2.2 billion shares changing hands, compared with last week's daily average of 2.1 billion. Declining stocks outnumbered advancing ones by nearly 2 to 1.
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