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Nikkei eases, loss forecasts hit Nintendo, NEC

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Reuters Tokyo
Last Updated : Feb 02 2013 | 11:04 AM IST

Japanese shares slipped on Friday, easing further from a three-month high hit earlier this week, after forecasts of big annual losses from NEC, Nintendo and Nippon Steel.

The US Federal Reserve's announcement this week that it would keep short-term interest rates "exceptionally low" at least until 2014 has helped underpin sentiment, however.

The Nikkei closed 0.1% lower at 8,841.22 in a choppy session, though it was up 0.9% for the week -- its third straight week of gains.

The benchmark is up 4.6% this month, and if the index were to finish with its current gains, it would be the best January performance since 1999.

Nintendo and NEC slid, the latest casualties of Apple's success with its iPhone.

Nintendo reported a sharp drop in quarterly profit and forecast a bigger-than-expected annual loss as its 3DS and Wii gaming devices failed to shine amid a consumer shift to iPhones and iPads. Its shares ended 4.1% lower, after shedding as much as 7.8% to hit an eight-year low.

NEC sank 7.1% after it warned on Thursday it would cut 10,000 jobs and post a net loss of 100 billion yen for the year ending in March, because of weak demand for its smartphones amid the popularity of the iPhone in Japan.

Apple's success has taken the shine off Japanese electronic and tech companies, which dominated the global industry in the 1980s and 1990s.

Based on Thursday's closing prices, Apple's market capitalisation was 74% more than the combined valuation of Canon, Nintendo, Sony, Panasonic, Toshiba, Hitachi, Mitsubishi Electric, Fujifilm, Fujitsu, Sharp Corp, Tokyo Electron and Hoya Corp.

The broader Topix dropped 0.5% to 761.13 on Friday. Volume moderated, with 1.93 billion shares changing hands on the main board, down from 1.96 billion shares on Thursday and 2.2 billion on Wednesday .

Stefan Worrall, director of equity at Credit Suisse in Tokyo, said the market remained relatively bullish.

"There are the reasons to take profit but at the same time there has been a clear loosening of US monetary policy it seems in the context of those (Fed) forecasts. We continue to see underweight long only positions being normalised, which provides some buying pressure," he said.

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First Published: Jan 27 2012 | 12:00 AM IST

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