May 30, 2012 / 6:52 AM / 6 years ago

Nikkei ends 4-day winning run; Renesas, Olympus rise

* Nikkei set for worst monthly fall in 2 years
    * Renesas bounces after recent slide, up 27.5 pct
    * Olympus gains 4 pct on report of tie-up

    By Dominic Lau	
    TOKYO, May 30 (Reuters) - Japan's Nikkei average ended a
four-session winning run on Wednesday, weighed by exporters as
the yen firmed on mounting concerns over Spain's banking system,
although Renesas Electronics Corp rebounded after a
recent slide.	
    Gains in Softbank Corp, up 2.7 percent after
Deutsche Bank upgrade, and scandal-hit Olympus Corp 
climbed 4 percent, helping to limit the losses on the Nikkei
, which closed 0.3 percent lower at 8,633.19.	
    "At the end of the month window-dressing comes into play,
but today the buying is mostly just closing out positions," said
Masayuki Otani, chief market analyst at Securities Japan.	
    The Nikkei is down 9.3 percent this month, on track for its
worst monthly loss in two years, and has fallen 15.8 percent
since hitting a one-year peak on March 27 on concerns about the
potential impact of a Greek exit from the euro zone and worries
over a slowing global growth.	
    "For four of its five weakest May performances, the Nikkei
rebounded the following month. A similar pattern holds for
November declines - four of the five worst November performances
were followed by December rebounds," said Eiji Kinouchi, chief
technical analyst at Daiwa Securities.   	
    Exporters came under pressure as the yen strengthened 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.	
    TDK Corp, which has high exposure to Europe, shed
1.6 percent, while Canon Inc lost 0.5 percent.	
    Chipmaker Renesas, whose share price was slashed in half
this month, surged 27.5 percent partly on news it would seek 100
billion yen ($1.3 billion) to pay for a proposed restructuring.	
    The stock was the biggest gainer on the main board after
sliding 16.4 percent on Tuesday to hit a record low.	
    "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 rose after the Asahi newspaper said Sony Corp
 and Panasonic Corp are the leading contenders
to take an equity stake in the medical equipment and camera
    Sony and Panasonic dropped 1.9 and 2.2 percent respectively.	
    The broader Topix index fell 0.5 percent to 723.62.	
    Nearly 1.62 billion shares changed hands on the main board,
down from Tuesday's 1.77 billion shares and last week's average
of 1.66 billion.	
    The recent sell-off has taken the Topix's 12-month forward
price-to-earnings ratio to 10.9, a level not seen since November
2008, Thomson Reuters Datastream showed.	
    Jefferies said it remained long volatility but switched from
tactical Nikkei short into short securities and banks
 as the financial sector was exposed to short-term
risk aversion ahead of the Greek elections on June 17.	
    "The Nikkei is nearing support at previous lows of 8,500,
there is likely resistance at 8,750, which in current thin
volumes, more positive price action may only be short-covering
and we may struggle to break higher," Naomi Fink, Jefferies'
Japan equity strategist, said in a note.	
    "Until investors bring volume back to the market, upside
could be limited."	
    Marubeni Corp sank 3.7 percent after the Japanese
trading company bought U.S. grain merchant Gavilon, a deal worth
$5.6 billion including about $2 billion in debt, as investors
were sceptical of how it would finance its biggest-ever
    The weak commodities market was also a worry for investors,
according to analysts, who said it would take time for Marubeni
to reap the benefits after becoming the world's largest grain
trader following the deal.

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