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Nikkei falls 1.5 pct as banking shares slip

Published 06/17/2009, 09:39 PM
Updated 06/17/2009, 09:50 PM
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* Nikkei slips on profit-taking after last week's 8-mth high

* Yen hovers near 2-week high vs dlr, weighs on exporters

* Mitsubishi Estate up, says interested in buying REIT

By Masayuki Kitano

TOKYO, June 18 (Reuters) - Japan's Nikkei stock average fell 1.5 percent on Thursday, pulling away from last week's eight- month high, as investors booked profits due to uncertainty about the prospects for a further pick-up in the economy.

Big banks such as Mizuho Financial Group tracked their U.S. peers lower, while exporters such as Honda Motor Co slipped as the yen hovered near a two-week high versus the dollar.

Mitsubishi Estate bucked the trend, rising 1.2 percent to 1,579 yen after Japan's second-biggest developer told Reuters on Wednesday it is interested in buying a real estate investment trust (REIT) in Japan and is preparing to launch a property investment fund in the United States.

"It seems like a pull-back phase. People who want to take profits are starting to appear," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

While there has been a recovery in factory production in Japan as inventory adjustments progressed, there are doubts about the outlook for final demand, Ogawa said.

Nevertheless, the Nikkei's retreat seems like a healthy move, given that its fall comes after the benchmark climbed above 10,000 last week, Ogawa said.

The Nikkei fell 149.44 points to 9,691.41. The Nikkei hit an eight-month closing high of 10,135.82 last Friday.

The broader Topix fell 1.4 percent to 909.84.

The dollar stood at 95.73 yen, after hitting a two-week low of 95.51 yen earlier this week.

That hurt exporters such as Honda, which fell 3.7 percent to 2,575 yen, while Canon Inc was down 2.5 percent to 3,120 yen.

Mizuho Financial Group slipped 2 percent to 246 yen, and Mitsubishi UFJ Financial Group fell 3.0 percent to 586 yen.

Market analysts say the Nikkei is likely to find support from the 25-day moving average that now lies near 9,600.

In U.S. trade, the Nasdaq rose slightly on the back of technology shares, while the Dow and S&P 500 both fell about 0.1 percent as U.S. bank shares took a hit from a debt ratings downgrade and uncertainty over Washington's extensive proposals for banking-industry reform. (Editing by Hugh Lawson)

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