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Nikkei edges lower on downbeat Japan, U.S. econ. data

(Xinhua)

09:37, December 29, 2011

TOKYO, Dec. 28 (Xinhua) -- Tokyo stocks edged lower Wednesday, with the benchmark Nikkei index dropping 0.20 percent following worse-than-expected macroeconomic data released in Japan and the U. S., coupled with concerns over an upcoming Italian bond sale, compounding a circumspect market mood.

Local traders said that the Nikkei moved in and out of negative territory in the morning session following a slew of economic data from the government coming in below median economists' forecasts.

Average spending by Japanese households dropped 3.2 percent in November for the ninth straight month, the core consumer price index fell 0.2 percent for a second straight month and also in the spotlight Wednesday was news released before markets opened that Japan's industrial production slumped a seasonally adjusted 2.6 percent in November from a month earlier, marking the first drop in two months.

Analysts said that in addition to a flat unemployment reading, held steady at 4.5 percent, the data spurred a circumspect market mood in Tokyo and as Shanghai shares lost ground in afternoon trade and the Kospi was being closely eyed in the wake of Kim Jon Il's funeral, sentiment here to chase riskier assets was diminished.?

"The data showed a larger-than-anticipated drop in production but it also suggested the decline may be temporary and that things will pick up in the next months, limiting its impact on the market, '' said Yumi Nishimura, senior market analyst at Daiwa Securities Co.

Other strategists also said that while the latest data from Japan and that from the U.S. showing a fall in housing prices muted buying sentiment in thin trade, as the bourse's international investors who account for around 65 percent of all participants, are less active during the year-end holiday season, a lack of fresh cues also stifled trade here and kept margins narrow.

"There's no incentive for investors to move their positions at the end of year," said Hisakazu Amano. "The bottleneck is U.S. housing data."

The 225-issue Nikkei Stock Average lost 16.94 points from Tuesday to 8,423.62, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 2.80 points, or 0. 39 percent, to end the day at 721.45.

Japanese financial and securities issues lost ground ahead of a key bond sale that could be in the region of 8.5 billion euros later on Thursday and analysts also said that investor's risk appetite in the sectors would remain low until wholesale moves were made by the European Central Bank to buy more eurozone debt.

As a result, Sumitomo Mitsui Financial Group Inc., fell 1.8 percent to 2,118 yen, while Nomura Holdings Inc. lost 1.7 percent to 235 yen.

Tokyo Electric Power, operator of the crippled Fukushima Daichi nuclear power plant, plunged 11.9 percent to 186 yen, following industry minister Yukio Edano advising the firm to be put under temporary state control and telling the embattled utility that it doesn't have the right to hike electricity prices at will to help counter it's dire balance sheet.

"Short-term traders are buying and selling Tepco, similar to Olympus. These are really the only stocks that are moving at all so people are picking them up and selling them, seeking short term gains," Toshiyuki Kanayama, senior market analyst at Monex Inc. said.

Building material maker Nitto Boseki Co. declined 5 percent to 267 yen, following the firm slashing its full-year net-income forecast by 42 percent and All Nippon Airways (ANA) was also among the day's notable decliners.

ANA fell 1.4 percent to 211 yen, following news that the firm will be pressured by government plans unveiled recently to expand shinkansen bullet train lines and destinations.

Bucking the downward trend however, department store operator J. Front Retailing Co. climbed 3.7 percent to 368 yen, following the company announcing it had more than doubled its full-year net- income forecast owing to lower corporate taxes.

Trading volume on Wednesday rose to 1.00 billion shares on the Tokyo Exchange's Firt Section, up from Wednesday's volume of 807. 17 million, with advancing issues outnumbering declining ones by 936 to 533.

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