Nikkei falls, weighed by exporters as yen firms

TOKYO Tue Apr 3, 2012 12:45pm IST

The graphs of various market indices are displayed on an electronic board outside a brokerage in Tokyo February 15, 2012. REUTERS/Yuriko Nakao/Files

The graphs of various market indices are displayed on an electronic board outside a brokerage in Tokyo February 15, 2012.

Credit: Reuters/Yuriko Nakao/Files

Related Topics

TOKYO (Reuters) - Japan's Nikkei share average fell on Tuesday but remained above 10,000, with the yen's climb to a three-week high against the dollar prompting investors to lock in profits on blue-chip exporters that have logged sharp gains since January.

"The yen's return to strength is driving the market break and it is easier for investors to take profits because of this, but there is plenty of dip-buying to provide support," said Masayuki Otani, chief market analyst at Securities Japan.

Toyota Motor Corp, which has soared 38.6 percent this year, slipped 0.3 percent, while Sony Corp lost 0.6 percent, although it still has a year-to-date gain of 23.5 percent.

The dollar was last trading at 81.93 yen after it hit a three-week low of 81.55 on the EBS trading platform in early Asian trade on Tuesday, as investors reduced massive short yen positions built up in recent weeks.

The Nikkei index closed 0.6 percent lower at 10,050.39, further retreating from a one-year high near 10,255 hit last week and down for six of the last 10 sessions, raising concerns that this year's rally is running out of steam.

The Nikkei posted its best first-quarter performance in 24 years this year and kicked off the new financial year with modest gains on Monday.

The benchmark has rallied nearly 19 percent since the start of January on the back of a global equities upturn, after a run of robust U.S. economic data and liquidity-boosting programmes by central banks.

Many market participants have been expecting pension funds and insurance firms to pick up equities in the new fiscal year.

PENSION FUNDS

But Jun Yunoki, equity strategy analyst at Nomura, said he believed pension funds were more likely to be sellers of equities.

"I think they are in the mood to sell. When the Topix declines a lot, they would rebalance their portfolios by buying equities," Yunoki said.

"The Topix was almost flat last fiscal year. Pension funds will not buy a lot. They have been trying to shed off risk assets in the longer trend."

The broader Topix index lost 0.6 percent to 851.02 on Tuesday.

Nearly 1.7 billion shares changed hands on the main board, down from 2.16 billion on Monday and last week's average of 1.98 billion.

Bucking the overall market, Fuji Media Holdings Inc gained 2 percent after Goldman Sachs upgraded the media company to "buy" from "neutral".

Goldman also downgraded Toho Co Ltd to "neutral" from "buy". Toho shares were down 2.4 percent.

Stock valuations on the Nikkei at the Monday close imply an earnings-per-share compound annual growth rate of 1.3 percent for the index as a whole over the next five years, data from Thomson Reuters StarMine showed.

That means the market is pricing the index as if EPS growth will be 1.3 percent every year over the five-year period, on a compound basis. This is down from 1.5 percent in mid-March but up from minus 0.8 percent in January.

Implied five-year EPS CAGR for the S&P 500 is 4.1 percent.

(Editing by Edmund Klamann)

FILED UNDER:

REUTERS EXCLUSIVE

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Eicher Motors Stake

Eicher Motors Stake

Volvo selling up to $300 mln worth of Eicher shares  Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage