TOKYO, Nov. 5, 2009 (Xinhua News Agency) -- Japan's 225-issue Nikkei Stock Average slumped to a one-month low Thursday with exporters pressured by a strong yen and circumspect investors looking to secure profits ahead of U.S. employment reports. The key Nikkei index lost 126.87 points or 1.3 percent from Wednesday to close at 9,717.44.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange also hit a one-month low shedding 6.31 points to 874.96.
"The market is now reaching the point where monetary stimulus policies stop pushing up asset prices and earnings become the main focus. Japan's stocks aren't likely to fare well in an earnings- driven market as shares are already quite expensive compared with prospective earnings," said Koichi Kurse a senior strategist at Resona Bank Ltd.
Sanyo Electric Co. Ltd., the world's largest maker of rechargeable batteries, tumbled 20.4 percent to 172 yen after Panasonic said it will offer to buy the company at 131 yen per share, compared with Wednesday's closing price of 216 yen. Sanyo was the Nikkei's sharpest decliner on stocks traded Thursday.
"The yen has gained slightly on the dollar, and this has prompted profit-taking among short-term investors, especially among shares that have already announced results," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
Amongst the exporters who struggled with a strong yen were Canon Inc. (NYSE:CAJ) , who fell 1.5 percent to 3,350 yen and Sony (NYSE:SNE) who shed 2. 1 percent to close at 2,550 yen. Honda Motor Co. (NYSE:HMC) also declined 2.6 percent to 2,785 yen.
"A sustained recovery in corporate profit seems unlikely as sales continue to fall, prompting investors to focus on short-term dealing. Without a drastic improvement in earnings, the current valuations can't be sustained," said Kenichi Hirano, general manager at Tokyo-based Tachibana Securities Co.
Positive quarterly profit reports from Toyota Motor Corp. (NYSE:TM) after the close revealed the world's largest automaker had halved its annual loss forecast as both sales and cost cutting exceeded forecasts although Toyota's shares dropped 0.8 percent to 3,580 yen before the 3:00 pm Thursday close.
Consumer lenders continued to advance Thursday on news the government could loosen stringent regulation of the hard-hit industry. Takefuji Corp. (OOTC:TAKAY) surged 19 percent to 488 yen.
Consumer lender Promise Co. Ltd. also gained 15 percent to 786 yen, whilst Acom Co. Ltd. rose 7.6 percent to 1,596 yen -- buoyed by Takehiro Tsuda a Citigroup Inc. (NYSE:C) analyst, raising his assessment of the industry to "neutral" from "bearish".
Banking sectors also gained Thursday with Mitsubishi UFJ, Japan 's top lender, gaining 1.3 percent to 486 yen and Sumitomo Mitsui Financial (OOTC:SMFJY) Group rising 1.9 percent to 3,170 yen. Mizuho Financial Group (NYSE:MFG) also saw gains of 0.6 percent to close at 181 yen.
Fast Retailing co. Ltd., the operator of budget-clothing chain behemoth Uniqlo, fell 3.7 percent to 15,200 losing ground gained on Wednesday following a sharp increase in in-store purchasing by customers. Sales at the Uniqlo chain in Japan leapt 35.7 percent in October from a year earlier, according to a spokesperson.
Fuji Media Holdings Inc. dropped 3.3 percent to 129,100 yen after cutting its full-year net income forecast by 41 percent, citing a slump in gains from advertising revenues. JPMorgan Chase (NYSE:JPM) & Co. reduced its rating on the media conglomerate to "neutral" from "overweight."
"As in the U.S. market, there were simply no buying incentives today. Investors were only picking up specific stocks such as Nissan Motors Co. Ltd. and others with good earnings reports, as well as resource-related issues," said Masumi Yamamoto, a Daiwa Securities SMBC Co. market analyst.
In a light day of trade Thursday 1.9 billion shares changed hands on the Tokyo exchange's First section, below last week's daily average of 2 billion.
Declining stocks outnumbered advancing ones by more than 2 to 1.
