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Nikkei dips, hurt by ex-dividend effect and yen

Published 09/27/2010, 09:46 PM
Updated 09/27/2010, 09:48 PM

* Nikkei down, ex-dividend effect dominates - analysts

* For rise to 10,000 level, dlr/yen rise essential-analyst

* Sources: Takefuji to file for bankruptcy with $5.2 bln debt

By Elaine Lies

TOKYO, Sept 28 (Reuters) - Japan's Nikkei average fell 0.7 percent on Tuesday, dropping as the deadline passed for investors to receive dividends on Tokyo stocks for the financial half year and as the yen clung close to its highest in almost two weeks.

But the market remained nervous about possible Japanese intervention to stem the yen's strength and stock losses were expected to be limited after the Nikkei business daily said the Bank of Japan will discuss further moves to ease monetary policy at its meeting next week.

"The market consensus is now that there won't be endless yen strengthening, that if the dollar falls below 84 yen authorities are likely to intervene, said Kenichi Hirano, operating officer at Tachibana Securities.

"But the Nikkei isn't going to rebound to 10,000 without at least a 2-3 yen rise in the dollar -- and that's going to be tough to achieve."

The benchmark Nikkei shed 70.70 points to 9,532.05 and has gained roughly 8 percent this month, its best monthly performance since March, helped by intervention by Japanese authorities to weaken the yen on Sept. 17.

There has also been speculation that Japanese authorities intervened again on Friday.

Much of the Nikkei's dip on Tuesday was believed to be due to an "ex-dividend effect", given that Monday was the last day for investors to buy many Japanese stocks and still get dividends on them for the half year that ends this month, analysts said.

Support for the benchmark was expected to stay solid near 9,450, the level of its 75-day moving average.

Despite this month's gains, the Nikkei has gained only some 1.6 percent this quarter

The broader Topix shed 0.6 percent to 844.22 on Tuesday.

The dollar was unchanged at 84.32 yen after falling as low as 84.11 yen on Monday, its weakest since the Sept. 17 intervention.

Shares of Takefuji Corp were untraded and overwhelmed with sell orders for a second day after sources said the money lender plans to file for bankruptcy on Tuesday with $5.2 billion in debt.

Sell orders for the stock came at 116 yen, compared with its Friday close of 171 yen.

On Monday, the stock was initially suspended by the Tokyo Stock Exchange after Japanese media reported that Takefuji was headed for bankruptcy. Once trade resumed near the end of the session, the stock remained untraded due to a glut of sell orders.

Other consumer lenders were mixed after falling sharply on Tuesday, with Aiful Corp flat and Acom up 1.9 percent to 1,370 yen. But Promise fell 1.6 percent to 678 yen.

A number of exporters slipped as well, hurt by a dip in New York shares, with Kyocera Corp down 1.5 percent to 8,060 yen and Sony Corp shedding 0.6 percent to 2,606 yen.

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