Tokyo stocks slip

Tokyo shares slipped 1.09 percent Monday as the yen strengthened on worries over the escalating crisis in Iraq. The benchmark Nikkei 225 index lost 164.55 points to finish at 14,933.29, while the Topix index of all first-section shares fell 0.75 percent, or 9.29 points, to 1,234.68. "The market is short-term overbought," said Yoshihiro Okumura, general manager at Chibagin Asset Management. "There isn't too much we can expect from a domestic investor-centred rally," he added.
"But recent Nikkei performances have been encouraging. If and when foreigners do return, the effect will likely be dramatic." Sentiment took a hit as investors nervously track events in Iraq - where Islamic militants are sweeping though the country, taking over key cities and moving towards Baghdad as US-trained Iraqi forces crumble.
Markets were also jittery as Europe faced gas supply disruptions Monday after Ukraine failed to broker an 11th-hour deal with Russia in a feud that has stoked the worst East-West crisis since the Cold War. Ukraine hosted the last-gasp talks hoping to keep an energy shortage from compounding the new pro-Western leaders' problems as they confront a two-month separatist insurgency threatening the survival of the former Soviet state.
The geopolitical jitters pushed currency traders into the yen, a safe haven during times of uncertainty and turmoil. In foreign exchange trade, the dollar weakened to 101.76 yen from 102.04 yen in New York Friday. A stronger yen is negative for exporters' shares as it hurts their profitability.
Toyota turned down 0.52 percent to close at 5,823 yen, Panasonic shares lost 1.50 percent to 1,182 yen and market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, fell 2.42 percent to 33,150 yen. Mitsubishi Heavy Industries dropped 3.66 percent to 630 yen. The industrial giant said Monday it was studying "various possibilities" for a joint deal with Siemens to buy pieces of French power-generation giant Alstom, with an offer deadline set to expire later in the day.
Shares of sports equipment makers underperformed the broader indices, after Japan went down 2-1 to Ivory Coast in their World Cup opener. Mizuno fell 1.77 percent to 607 yen, while Asics lost 1.53 percent to 2,305 yen. "It's an 'event trade', so to speak, and not based on anything really fundamental, but expectations for Japan's team were higher going into the current World Cup," Tachibana Securities market analyst Kenichi Hirano told Dow Jones Newswires. In New York, the Dow rose 0.25 percent on Friday but was down over the week.