Tokyo stocks fall on profit taking

20:48, February 23, 2010      

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Japan's Nikkei Stock Average edged down 0.47 percent on Tuesday as investors locked in profits following notable gains made on Monday and shunned export-related issues ahead of U.S. Federal Reserve Chairman Ben Bernanke's congressional testimony on Wednesday and Thursday, regarding interest rate moves.

Japan's key benchmark Nikkei lost 48.37 points from Monday to 10,352.10. The broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 2.38 points, or 0.26 percent, to 907. 37.

Analysts here said that investors still remained cautious after last week's surprise U.S. discount rate hike, but added that a sense was spreading in the market that further surprises were unlikely for now.

"Personally, I don't think there will be any quick hike of the fed funds rate. Indicators are showing a real mix, with the U.S. Consumer Price Index last week lower than expected," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"What Bernanke will likely do is say that they are gradually normalizing what was an emergency situation."

Federal Reserve Chairman Ben Bernanke's congressional testimony on Wednesday and Thursday is also a focus of attention as the market seeks clarity regarding the Federal Reserve's interest rate moves, brokers added.

"Investors are awaiting important events in the United States such as Bernanke's testimony and Toyota's hearings," said Tsuyoshi Segawa, an equity strategist at Mizuho Securities.

"Without strong trading factors at the moment, profit-taking in blue-chip stocks, which had rallied yesterday, is coming to the fore."

Investors opting for profits on Tuesday were also eagerly awaiting the scheduled appearance of Toyota Motor Corp. executives, including President Akio Toyoda, at U.S. congressional hearings beginning later Tuesday.

Toyota's upper management face two days of congressional hearings on its handling of safety problems, which have been compounded by a U.S. congressional panel also accused the world's largest automaker of making misleading statements.

Shares in Toyota Motor Corp. closed down 0.5 percent at 3,325 yen and Honda Motor Co., an automaker that gets more than 80 percent of sales abroad, lost 2.2 percent to 3,110 yen.

Meanwhile Mazda Motor Corp. shed 0.87 percent to 228 yen and Nissan Motor Co. Ltd. fell 1.19 percent to 745 yen.

Buying in export-related issues was lackluster as the dollar traded near the 91-yen line and the euro around the 124-yen line, both lower that at Monday's close.

Shares of Sony Corp. slipped 0.3 percent to 3,190 yen and Kyocera Corp. lost 0.96 percent to 8,240 yen. Olympus Corp. fell 1. 77 percent to 1,273 whilst Canon Inc. retreated 0.65 percent to 3, 825 yen.

Advantest Corp., maker of chip testers, fell 0.8 percent to close at 2,217 yen on Tuesday.

Shipping lines were among notable gainers on Tuesday with Kawasaki Kisen Kaisha Ltd., Japan's third-largest shipping line, climbing 3.5 percent to 326 yen as Morgan Stanley raised its investment rating to "overweight" from "equalweight."

Inui Steamship Co. jumped 5.6 percent to 703 yen after saying it expects to pay a dividend of 10 yen per share for the year ending March 31, double last year's level and the company also raised its forecast for annual net income.

Fellow shipper Mitsui O.S.K. Lines Ltd. rose 1.5 percent to 596 yen, while Nippon Yusen KK edged up 0.6 percent.

Trade was thin on the Tokyo exchange's First section, with some 1.7 billion shares changing hands, slightly above Monday's volume of 1.6 billion shares

Declining issues outnumbered advancing ones by 859 to 653.

Source: Xinhua
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