* Nikkei expected to move between 16,500-17,500 for next few
weeks - analyst
* Defensive stocks outperform
By Ayai Tomisawa
TOKYO, Oct 12 Japanese stocks dropped on
Wednesday morning, retreating from a five-week high after Wall
Street was hit by weak corporate earnings overnight and as
investors braced for Japan Inc.'s reporting season.
The benchmark Nikkei share average fell 0.8 percent
to 16,895.42 in midmorning trade, after ending at a level not
seen since early September on the previous day.
U.S. shares fell after Alcoa missed its quarterly
estimates and cut its revenue forecast.
"Alcoa's result soured sentiment towards U.S. earnings in
the beginning of the earnings season," said Isao Kubo, an equity
strategist at Nissay Asset Management.
Later in the month, major Japanese companies will also begin
releasing earnings for the first half through September.
"Japanese corporate earnings are expected to show weakness
(due to a stronger yen), so for the next few weeks, the market
will likely be volatile," said Yoshihiro Okumura, general
manager at Chibagin Asset Management, adding that the Nikkei is
expected to move between 16,500-17,500 for the next few weeks.
On Wednesday, cyclical stocks fell in sympathy with
investors' risk-averse mood. Banks underperformed, with
Mitsubishi UFJ Financial Group and Mizuho Financial
Group each dropping 1.9 percent.
Exporters were broadly weak, with Toyota Motor Corp
shedding 0.4 percent and Nissan Motor Co falling 0.5
Defensive stocks, including construction, real estate and
railroad firms, outperformed. Contractor Kajima Corp
rose 2.3 percent, realtor Mitsui Fudosan Co gained 0.4
percent and East Japan Railway Co added 0.2 percent.
Japan's machinery data had little impact on the market,
although core orders fell much less than expected in August
The broader Topix shed 0.3 percent to 1,351.96 and
the JPX-Nikkei Index 400 declined 0.3 percent to
(Editing by Shri Navaratnam)