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Nikkei falls 1.3 percent, exporters falter

Published 09/23/2010, 09:47 PM
Updated 09/23/2010, 09:48 PM

* Yen's resilience vs dollar drags exporters lower

* Investors looking to book profits after rally-fund manager

* Japan-China spat weighs on China-related shares -trader

* Nikkei has support near 9,400 on daily Ichimoku chart

By Masayuki Kitano

TOKYO, Sept 24 (Reuters) - Japan's Nikkei stock average fell 1.3 percent on Friday after a weak reading on the U.S. job market pushed down shares on Wall Street, with exporters hurt by the yen's resilience versus the dollar.

The Nikkei hit a seven-week high just above 9,700 earlier this week, getting a boost as the yen retreated against the dollar after Japan conducted its first yen-selling intervention in six years last week.

But the benchmark index has since trimmed its gains, with the yen having clawed back up from lows near 85.95 yen to the dollar struck after last week's intervention. The yen was trading at 84.52 yen to the dollar on Friday.

Sony Corp and other exporters slipped after an unexpected rise in weekly first-time jobless claims, a rise that also sent the yen higher against the dollar.

While the potential for further yen-selling intervention is a supportive factor for Tokyo shares, investors are reluctant to chase shares higher, said Kiyoshi Noda, chief fund manager for MU Investments.

"I think many market players are looking for chances to book profits if there is any rebound," Noda said.

"There are persistent concerns about the U.S. economy, and unless that situation improves, it is hard to think that there will be a big shift in the overall trend," he added.

The benchmark Nikkei dropped 124.13 points to 9,442.19. The broader Topix index declined 0.9 percent to 838.92.

The Nikkei has support near 9,400, which is right around the bottom of the cloud on daily Ichimoku charts.

Even with Friday's decline, the Nikkei is up about 7 percent for the month, on track for its biggest monthly percentage gain in six months.

Sony lost 0.4 percent to 2,577 yen, Honda Motor Co shed 1 percent to 2,924 yen and chip tester maker Advantest fell 2.8 percent to 1,686 yen.

Shares of companies with strong exposure to China, such as Komatsu and Hitachi Construction Machinery, remained under pressure as a row between Japan and China over ownership of islets in the East China Sea dragged on.

"There has been a negative reaction and there have been signs of selling pressure on China-related shares," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

Komatsu shed 0.5 percent to 1,866 yen and Hitachi Construction Machinery fell 1.8 percent to 1,782 yen. (Editing by Edwina Gibbs)

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