Reuters: Market News: Nikkei down for 4th day, marks worst week in 8 months

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Nikkei down for 4th day, marks worst week in 8 months Apr 6th 2012, 06:36 Fri Apr 6, 2012 2:36am EDT * Topix trading volume lowest since mid-January * U.S. jobs report, BOJ meeting in focus * Astellas Pharma up after U.S. panel backs drug * Shimamura higher after earnings, target price hike By Mari Saito TOKYO, April 6 (Reuters) - Japan's Nikkei average fell in thin volume on Friday ahead of a key U.S. jobs report and marked its worst weekly performance in eight months on fading hopes of further U.S. stimulus and fresh concerns over the euro zone. "The very optimistic view of the U.S. economy has already been priced in. We can't expect further monetary easing from the Fed," said Ryota Sakagami, chief equity research strategist at SMBC Nikko Securities. "On the other hand, we see uncertainty in the European debt crisis and the general elections in Greece and the presidential election in France will only create further uncertainty." The benchmark Nikkei dropped 0.8 percent to 9,688.45, falling for a fourth consecutive session. The index was off 3.9 percent on the week, its worst weekly performance since the week of Aug. 1-5 when it shed 5.4 percent. Despite this week's sharp losses, the Nikkei is still up 14.6 percent this year, buoyed by a run of strong U.S. economic data and liquidity boosting programmes by central banks. Strategists expected the market correction to last until late April or mid-May, when Japanese companies will announce earnings guidance for the current fiscal year, though they said the Nikkei should hold above 9,000. "The earnings growth scenario for Japanese companies remains intact so this is just a speed adjustment after the big gains we've seen recently," said Shun Maruyama, chief Japan equity strategist at BNP Paribas. Data from Thomson Reuters I/B/E/S pointed to an improved earnings outlook for the Topix, with its earnings momentum - analysts' upgrades minus downgrades as a total percentage - rising to 3.5 percent in March from minus 6.6 percent in February. Maruyama said investors should pick up blue chips during the correction that are expected to make a robust earnings recovery like semiconductor makers, autos and machinery. He also said domestic and foreign long-only funds were picking up defensive shares at the dip. Among heavily traded stocks, Toyota Motor Corp sagged 2 percent on Friday, falling for a seventh session as investors continued to lock in sharp gains made since January. The stock is still up more than 32 percent this year. A firmer yen against the euro also weighed on exporters, with TDK Corp losing 2.1 percent and Canon Inc off 1 percent. The euro last traded at 107.51 yen after hitting a four-week low of 106.89 yen on Thursday. Tokio Marine Holdings Inc shed 1.4 percent, hurt by a downbeat note from JPMorgan, which said the insurer may be at risk of missing targets. The broader Topix index fell 0.8 percent to 825.71. Slightly more than 1.6 billion shares changed hands on the main board, its lowest full-day trading volume since mid-January. Trading was particularly thin as markets in Australia, Hong Kong and Singapore were closed for the Easter holiday. U.S. JOBS Economists polled by Reuters expect the nonfarm payrolls report due at 1230 GMT to show the U.S. economy added 203,000 jobs in March. That would represent a fourth consecutive month of solid job creation, marking the longest stretch of monthly employment gains topping 200,000 since 1999. A trader said investors can buy Nikkei options with the right to sell the index at 9,500 in April or May as a "cheap" hedge against a disappointing U.S. jobs report. But whether the U.S. figure comes in above or below expectations, strategists said there will be disappointment as the former will indicate less chance of another round of monetary easing by the U.S. Federal Reserve, while the latter will point to a slowing economic recovery. Another focus next week is Bank of Japan's two-day policy meeting, although the prevailing view among market analysts is that the central bank will hold off on any action until its meeting on April 27. Bucking the weak trend, Astellas Pharma Inc gained 3.2 percent after a panel of outside advisers to the U.S. Food and Drug Administration backed the company's bladder drug, boosting its hopes of gaining approval by the regulator. Also gaining was clothing retailer Shimamura Co Ltd , which climbed 2.6 percent after it posted an operating profit of 43.95 billion yen ($533.57 million) for the year ended Feb. 20, up 10.3 percent from the previous year. The stock was also buoyed by JP Morgan's target price hike to 10,400 yen from 9,600 yen. Link this Share this Digg this Email Reprints

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