May 30, 2012 / 1:52 AM / 5 years ago

Nikkei edges down, risk sentiment dampened by Spain worries

* Renesas bounces, up 30 pct; trader says oversold
    * Olympus up 6 pct on report of tie-up
    * Spain worries continue to depress sentiment

    TOKYO, May 30 (Reuters) - Japan's Nikkei inched down early
on Wednesday, with speculation of China stimulus steps failing
to inspire risk taking, although troubled chipmaker Renesas
Electronics Corp staged a dramatic rebound and Olympus
Corp soared on a reported tie-up.	
    The Nikkei share average slipped 0.8 percent to
8,584.78, while the broader Topix index fell 1 percent
to 719.86 by 0145 GMT.	
    Softbank Corp put on a solid 3 percent and was the
top traded stock by turnover after Deutsche Securities upgraded
the telecommunication company's rating to "buy" from "hold" and
raised its target price to 2,810 yen from 2,570 yen, saying it
had an impressive subscriber growth rate.	
    "The market reacted well to signs that a Chinese stimulus
programme may be coming yesterday, but now that's priced in it's
back to worrying about the euro zone," said Hideyuki Ishiguro,
assistant manager of investment strategy at Okasan Securities.
"The market is tired of waiting for the Greek election, so the
focus is shifting to Spain." 	
    Exporters remained under pressure as the yen firmed to a
four-month high against the euro after Spain's borrowing costs
rose on Tuesday towards the 7 percent level that led other
countries to seek a bailout. 	
    "Japanese stocks are cheaper than ever, but buyers will be
put off by the strong yen," said Hiroichi Nishi, equity general
manager at SMBC Nikko Securities. 	
    Renesas Electronics soared 30 percent, bouncing back after
its share price was slashed in half this month and the troubled
chipmaker said it plans to raise 100 billion yen ($1.3 billion)
to pay for a proposed restructuring. 	
    "It has been oversold ... They're hoping to get some capital
injection, significantly lessening the downward pressure," a
dealer at a European brokerage said.  	
    Olympus Corp also jumped, gaining 5.5 percent after
the Asahi newspaper reported that it was seeking a capital
tie-up worth tens of billions of yen with either Sony Corp
 or Panasonic Corp. Both
companies fell 2 percent on the news that they could be
associated with scandal-ridden Olympus.	
    The Nikkei was out of "oversold" territory, with its 14-day
relative strength index at 31.3, but market analysts said it
would encounter strong resistance on the upside as most buying
was short-covering and buying on dips. 	
    "There won't be any reason for buying in earnest until the
euro zone calms down, but right now it's moving in an ominous
direction," Ishiguro of Okasan Securities said.	
    The Nikkei is down 16 percent from its year high of
10,255.15 on March 27 and has posted a weekly loss for eight
consecutive weeks, its worst run for 20 years, on a deepening
euro zone debt crisis and concerns about the slowing global
recovery.

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