TOKYO, Oct. 22, 2009 (Xinhua News Agency) -- Japan's 225-issue Nikkei Stock Average closed down 66.22 points to 10,267.17 on Thursday, whilst the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 0.6 percent to 908.60, following minor gains made on Wednesday.
In a day of cautious trading ahead of the upcoming Japanese earnings season, which will swing into full gear next week, and on the back of China's robust economic growth in the third quarter, exporters and banking stocks lost on gains made recently.
China's economy expanded by a staggering 8.9 percent in the third quarter, although such monumental growth wasn't wholly unpredicted according to Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.
"There were no surprises in China's economic data. They were within economists' expectations," he said.
"Investors' focus was more on Japanese corporate earnings. With earnings results by major companies, investors want to gauge whether the global economy is going to make a steady recovery."
Although several U.S. banks posted favourable quarterly earnings on Wednesday that exceeded market expectations U.S. stocks slumps and Japan's banking sector duly followed suit.
Punctuated by reports that Wells Fargo & Co. (NYSE:WFC) a diversified financial services company providing banking, insurance, investment, mortgage and consumer finance, had their stock rating cut due to mounting loan losses, prompting a sell-off in financial shares, Japan banks weakened according to analysts.
Japan's number one lender Mitsubishi UFJ Financial Group (NYSE:MTU) shed 3. 1 percent to 472 yen, whilst Mizuho Financial Group (NYSE:MFG) relinquished 2. 2 percent to 177 yen. Sumitomo Mitsui Financial (OOTC:SMFJY) Group lost 2.7 percent to 3,220 yen.
"There's been a tendency this earnings period for U.S. shares to fall even if their results are fairly positive, and investors are worried the same thing may happen here. Plus given worries about a stronger yen, some investors wonder if the second half might not be as good as this one. They want to sell while things are still good," said Takashi Ushio, head of the investment strategy division at Marusan Securities.
Tech-shares across the board took a dive today including Advantest Corp (NYSE:ATE) which shed 1.7 percent to 2,365 yen and Tokyo Electron Ltd. (OOTC:TOELY) which fell 1.2 percent to 5,610 yen. Kyocera Corp. (NYSE:KYO) in turn slipped 1.4 percent to close at 8,020 yen.
Japan Airlines Corp. reversed recent gains made this week dropping 3.2 percent to 122 yen as reports cited the ailing carrier's losses may amount to as much as U.S. 5.5 billion dollars for the year ending in March.
JAL's losses were compounded by news of hefty restructuring costs and calls to the Development Bank of Japan for debt-waivers and debt-for-equity swaps totaling 50 billion yen (U.S. 550 million dollars).
Some gains were seen in automotive sectors today as Toyota, the world's number one automaker, rose 0.6 percent to 3,630 yen and Honda Motor Co. (NYSE:HMC) was also up 1.8 percent to 2,830 yen. Nissan Motor Co. (OOTC:NSANY) however shed 1.5 percent to close down at 656 yen.
Declining stocks outpaced advancers by nearly 2 to 1 in a day of moderate trade across both First and Second Sections. Up to 2 billion shares were moved today, inline with last week's daily average.
