Japan's Nikkei extends losing streak as Sony tumbles

Wed Apr 11, 2012 12:16pm IST

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* Nikkei falls for seventh day running
    * Sony tumbles 4.5 pct after forecasting wider net loss
    * Stronger yen weighs on exporters

    By Sophie Knight	
    TOKYO, April 11 (Reuters) - Japan's Nikkei share average
dropped 0.8 percent on Wednesday to mark its seventh consecutive
session of losses as fresh concerns about Spanish and Italian
finances and slowing global growth sapped investor appetite.	
    Sony Corp and Sharp Corp's forecast of
bigger annual losses and a firmer yen also weighed on Japanese
electronics companies.	
    The Nikkei was down 79.28 points at 9,458.74,
extending its worst run since July 2009.	
    Sony tumbled 4.5 percent after the consumer electronics
company forecast a record $6.4 billion annual net loss on
Tuesday, doubling an earlier forecast and marking a fourth
consecutive year in the red. 	
    Toshiyuki Kanayama, a senior market analyst at Monex Inc,
said Sony's steep losses were unlikely to continue into
Thursday, but the core problem faced by the company remains.	
    "The issue is that they don't have any new products to move
forward with," he said, adding that Panasonic Corp and
Sharp suffer from a similar problem. 	
    Sharp shed 3.2 percent after it raised its overall loss
forecast for the year that ended March to a record net deficit
of 380 billion yen ($4.70 billion), a 31 percent increase from
an earlier estimate. 	
    "Japan's consumer electronics industry is facing defeat,"
said Fujio Ando, senior managing director of Chibagin Asset
Management. 	
    A stronger yen, with the dollar last traded at 80.897 yen
, diminished investor appetite for Tokyo stocks, with
major exporters sold heavily. Toyota Motor Corp, Honda
Motor Co and Panasonic fell between 1.2 and 2.2
percent. 	
    Monex's Kanayama said the next psychologically key level
would be around 9,200, edging towards its 200-day moving average
at 9,093. The index has lost 6.2 percent so far in April after
rising more than 19 percent in the January-March period. 	
    The broader Topix index lost 0.9 percent to finish
at 805.84. 	
    Nearly 2.1 billion shares changed hands on the main board,
up from 1.93 billion shares on Tuesday.	
    	
    EUROPE PERIPHERALS	
    "The problem is Europe ... we have been worried about Greece
and have largely overlooked the problems in Italy, Spain and
European peripherals," said Yutaka Miura, senior technical
analyst at Mizuho Securities.	
    European shares slid on Tuesday after yields on Spanish and
Italian debt rose, as doubts over global growth exacerbated
concerns about the fragility of peripheral euro zone economies.	
    Adding to these concerns, Spain's central bank governor
warned that the country's banks may need more capital if the
economy deteriorates.	
    	
    Most market participants remained optimistic that the Bank
of Japan will take additional accommodative measures and give
Tokyo equities a boost at its meeting later this month after it
refrained from action at Tuesday's meeting. 	
    However, HSBC was sceptical that the BOJ had become serious
about quantitative easing and remained "underweight" on Japanese
equities.	
    "We are unconvinced it is serious about achieving its
inflation 'target'. One sign of this is that the Japanese word
it uses, medo, means a vague aim or outlook and is not the
conventional word for target (mokuhyo)," said Garry Evans,
HSBC's global head of equity strategy, in a report.	
    Evans said BOJ chief Masaaki Shirakawa's remarks at a Fed
conference on March 24 was further evidence of its reluctance to
act. 	
    "He (Shirakawa) argued that excessive monetary easing after
a crisis is likely to backfire because it will tend to reduce
incentives to cut debt, negatively affect productivity, hurt
bank profits and push up commodity prices."
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