 "Nikkei slips for 2nd day, investors lock in profits from rally")
The Nikkei share average slipped for a second day on Wednesday as investors took a firmer yen as a cue to pocket profits in exporters like Panasonic Corp after an eight-session market rally.
But expectations for further monetary easing by the Japanese central bank kept losses in check, and shares of warehouse operators and other expected beneficiaries from the government's reflationary push managed to buck the downdraft.
The Nikkei closed down 0.6% at 12,239.66, after seesawing in and out of positive territory through the day. The benchmark is down 1.8% from a 4-1/2 year high of 12,461.97 hit in early trade on Tuesday.
"The Nikkei is seeing a little correction," said Kenichi Hirano, a strategist at Tachibana Securities. "When the index moves away from its 25-day moving average by more than 5%, there usually is a technical adjustment."
The Nikkei is now trading 5.5% above its 25-day moving average of 11,596.94. Still, analysts said they did not expect a deep correction, as the benchmark closed just a whisker above support at its five-day moving average.
The dollar fell 0.2% in Asia to 95.85 yen, yielding to profit-taking after hitting a 3-1/2-year peak of 96.71 yen the previous day that had taken its year-to-date gains to more than 10%.
The firmer yen weighed on shares of exporters including Panasonic, which dropped 2.9%. Canon Inc fell 2.8% and Toyota Motor Corp lost 1%.
But buying by overseas investors is expected to underpin the market, helping to cushion selling by Japanese investors as they await the start of the new financial year on April 1 to allocate new funds, market participants said.
"As the fiscal year-end nears, domestic investors sell to adjust their positions. They will likely move to the sidelines soon and they won't invest aggressively until new funds are allocated in April," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "But hot money is pouring into the Japanese market as foreign investors are buying."
Before the opening bell, foreigners placed net buy orders for Japanese stocks for a sixth straight day.
UPWARD MOMENTUM
Warehouse companies, which have large asset values and are considered beneficiaries of Prime Minister Shinzo Abe's reflationary policy, bucked the market fall on Wednesday. Shibusawa Warehouse Co jumped 7% and Mitsui-Soko Co surged 8%.
"The market's upward momentum is still intact," said Hiroaki Hiwada, a senior strategist at Toyo Securities. "Considering major Japanese companies are promising to meet union demands for bonuses, it looks like business sentiment is improving."
Several large Japanese companies have said they will pay out bigger bonuses this year, including Toyota, which declared its largest bonus payout since the global financial crisis.
Shares related to Boeing Co gained after the aircraft maker won approval from US transport regulators to start testing a redesigned battery for the 787 Dreamliner, putting it one step closer to getting the troubled airplane back into regular service.
GS Yuasa Corp, the battery maker for the Dreamliner, rose 0.7%. All Nippon Airways Co Ltd and Japan Airlines Co Ltd, which both own Dreamliners, advanced 1.5% and 1.7%, respectively.
Elsewhere, Nikon Corp rose 3.2% after the Nikkei newspaper said that the camera maker was planning to reduce inventory by 20% from December levels by March 31, by re-examining its marketing strategy and streamlining output.
The Nikkei average has gained 17.7% this year and 5.9% this month, as likely higher overseas income for exporters on the back of the weakening yen and hopes for more monetary easing have encouraged investors to buy equities.
But expectations for further monetary easing by the Japanese central bank kept losses in check, and shares of warehouse operators and other expected beneficiaries from the government's reflationary push managed to buck the downdraft.
The Nikkei closed down 0.6% at 12,239.66, after seesawing in and out of positive territory through the day. The benchmark is down 1.8% from a 4-1/2 year high of 12,461.97 hit in early trade on Tuesday.
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The broader Topix shed 0.4% to 1,031.42.
"The Nikkei is seeing a little correction," said Kenichi Hirano, a strategist at Tachibana Securities. "When the index moves away from its 25-day moving average by more than 5%, there usually is a technical adjustment."
The Nikkei is now trading 5.5% above its 25-day moving average of 11,596.94. Still, analysts said they did not expect a deep correction, as the benchmark closed just a whisker above support at its five-day moving average.
The dollar fell 0.2% in Asia to 95.85 yen, yielding to profit-taking after hitting a 3-1/2-year peak of 96.71 yen the previous day that had taken its year-to-date gains to more than 10%.
The firmer yen weighed on shares of exporters including Panasonic, which dropped 2.9%. Canon Inc fell 2.8% and Toyota Motor Corp lost 1%.
But buying by overseas investors is expected to underpin the market, helping to cushion selling by Japanese investors as they await the start of the new financial year on April 1 to allocate new funds, market participants said.
"As the fiscal year-end nears, domestic investors sell to adjust their positions. They will likely move to the sidelines soon and they won't invest aggressively until new funds are allocated in April," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "But hot money is pouring into the Japanese market as foreign investors are buying."
Before the opening bell, foreigners placed net buy orders for Japanese stocks for a sixth straight day.
UPWARD MOMENTUM
Warehouse companies, which have large asset values and are considered beneficiaries of Prime Minister Shinzo Abe's reflationary policy, bucked the market fall on Wednesday. Shibusawa Warehouse Co jumped 7% and Mitsui-Soko Co surged 8%.
"The market's upward momentum is still intact," said Hiroaki Hiwada, a senior strategist at Toyo Securities. "Considering major Japanese companies are promising to meet union demands for bonuses, it looks like business sentiment is improving."
Several large Japanese companies have said they will pay out bigger bonuses this year, including Toyota, which declared its largest bonus payout since the global financial crisis.
Shares related to Boeing Co gained after the aircraft maker won approval from US transport regulators to start testing a redesigned battery for the 787 Dreamliner, putting it one step closer to getting the troubled airplane back into regular service.
GS Yuasa Corp, the battery maker for the Dreamliner, rose 0.7%. All Nippon Airways Co Ltd and Japan Airlines Co Ltd, which both own Dreamliners, advanced 1.5% and 1.7%, respectively.
Elsewhere, Nikon Corp rose 3.2% after the Nikkei newspaper said that the camera maker was planning to reduce inventory by 20% from December levels by March 31, by re-examining its marketing strategy and streamlining output.
The Nikkei average has gained 17.7% this year and 5.9% this month, as likely higher overseas income for exporters on the back of the weakening yen and hopes for more monetary easing have encouraged investors to buy equities.