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Nikkei dips on profit-taking; Kadokawa, Dwango soar on merger report
May 14, 2014 / 2:02 AM / 4 years ago

Nikkei dips on profit-taking; Kadokawa, Dwango soar on merger report

* Nikon hits lowest since March 2011 on profit decline
    * Sony, megabanks' earnings eyed on Wednesday

    By Ayai Tomisawa
    TOKYO, May 14 (Reuters) - Japan's Nikkei average edged down
on Wednesday, slipping from a 1-1/2-week high on profit-taking
after big gains the previous day, while Kadokawa Corp 
and Dwango Co soared on a media report that the two
firms plan to merge.
    Publishing house Kadokawa and online video distributor
Dwango both jumped 14 percent after the Nikkei newspaper
reported they would merge operations under a holding company to
be set up as early as next spring. Dwango was the eighth most
traded stock by turnover.
    The Nikkei said Kadokawa aims to take advantage of Dwango's
online service and related expertise to bring its own movies,
games and other content directly to consumers, including those
outside Japan.
    The benchmark Nikkei was down 0.2 percent at
14,392.20 in midmorning trade after rising 2.0 percent to
14,425.44 on Tuesday, its highest close since May 2.
    Index heavyweights SoftBank Corp and KDDI Corp
, which gained sharply on Tuesday, languished on
profit-taking, falling 1.0 percent and 3.9 percent,
    Market observers said resistance for the Nikkei would likely
stay at 14,500 for the time being.
    "We still have major earnings to be reported. The market
lacks positive catalysts for investors to chase shares higher,"
said Hikaru Sato, a senior technical analyst at Daiwa
    Companies reporting earnings on Wednesday include Sony Corp
 and major banks Mitsubishi UFJ Financial Group 
and Sumitomo Mitsui Financial Group.
    Nikon Corp dropped 6.7 percent to 1,524 yen, its
lowest since March 2011, after forecasting a decline in net
profit for the year through March 2015, hurt by its poorly
performing digital camera business.
    Exporters gained marginally, with Toyota Motor Corp 
rising 0.3 percent, Honda Motor Co adding 0.6 percent
and Canon Inc advancing 0.2 percent.
    The broader Topix was flat at 1,178.87. The new
JPX-Nikkei Index 400 was also flat, at 10,731.76.

 (Editing by Chris Gallagher)

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