* Department store stocks underperform on weak March sales
* Banks, insurers tumbled on falling U.S. yields
By Ayai Tomisawa
TOKYO, April 4 Japan's Nikkei share average fell
on Tuesday as the safe-haven yen rose and as automakers tumbled
on weaker-than-expected U.S. sales.
Financial stocks such as banks and insurers, which seek to
boost returns from higher yielding U.S. bonds, also lost ground
after yields on 10-year U.S. Treasury notes overnight fell to
the lowest level since Feb. 27.
The Nikkei dropped 0.3 percent to 18,929.72 points
"Stock investors are becoming nervous about U.S. yields,"
said Isao Kubo, equity strategist at Nissay Asset Management,
adding that markets are focused on upcoming U.S. economic data
and developments on U.S. President Donald Trump's economic
Mitsubishi UFJ Financial Group shed 1.7 percent,
Mizuho Financial Group declined 0.9 percent, while
Dai-ichi Life Holdings fell 2.1 percent and T&D
Holdings tumbled 1.5 percent.
U.S. auto sales for March came in below market expectations
and gave early evidence that America's long, robust boom cycle
for car sales may finally be losing steam.
Shares in Toyota Motor Corp dropped 1.1 percent
after it reported a 2.1 percent decrease in March sales compared
to the previous year. Honda Motor Co tumbled 2.6
percent after its march sales dropped 0.7 percent.
Some automakers such as Nissan Motor Co and Mazda
Motor Corp reported increased sales, but their shares
stumbled 2.6 percent and 3.8 percent, respectively, as
uncertainty about future auto demand in the U.S. market weighed.
The dollar extended overnight losses and was down 0.15
percent at 110.685 yen, its lowest in a week as investors
are cautious before the upcoming meeting between Trump and
Chinese President Xi Jinping, while sentiment was soured by
suspected suicide bombing in St. Petersburg, Russia.
Department store stocks also underperformed, with Isetan
Mitsukoshi Holdings falling 1.2 percent and J.Front
Retailing shedding 2.6 percent after they said March
sales dropped 0.3 percent on the year, hit by weak demand for
spring clothes due to unseasonally cold weather.
The broader Topix dropped 0.4 percent to 1,510.82
and the JPX-Nikkei Index 400 declined 0.4 percent to
(Editing by Kim Coghill)