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Nikkei slips as exporters fall, JAL rebounds

Published 10/18/2009, 08:56 PM
Updated 10/18/2009, 09:00 PM
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* Nikkei slips on profit-taking after Wall Street fall

* JAL up on sense that stock fell too far last week

TOKYO, Oct 19 (Reuters) - Japan's Nikkei stock average slipped 0.9 percent on Monday as exporters such as Honda Motor Co fell after disappointing U.S. corporate earnings robbed the market of upward momentum sparked by earlier upbeat results. But struggling Japan Airlines Corp rose nearly 10 percent after losing 26 percent of its value last week, staging what market players said was a temporary rebound on a sense the stock had fallen too far.

The Sankei newspaper reported on Sunday that Japanese government task force set up to keep JAL afloat has decided to tap a state-backed institution tasked with revitalising struggling companies. "Overall, global stock markets are doing well and the yen's retreat against the dollar compared to last week's levels is contributing to a good environment for the Nikkei," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"What we're seeing is just profit-taking, with Wall Street's Friday fall providing the excuse, along with a sense that the market may have risen too far, too fast."

The benchmark Nikkei lost 78.97 points to 10,178.59 after hitting a three-week closing high on Friday. During the two weeks from Oct. 5 the Nikkei rose more than 5 percent on better-than-expected results from firms like JPMorgan Chase & Co.

The broader Topix lost 0.1 percent.

U.S. stocks fell on Friday after disappointing results from General Electric Co and Bank of America Corp demonstrated the road to economic recovery will be bumpy.

Analysts said investors may have become too optimistic going into the earnings season, in contrast to the previous quarter when the bar was set low.

A broad range of exporters lost ground, with Kyocera Corp down 1.7 percent to 7,940 yen, Advantest Corp -- which makes chip testing equipment -- down 1 percent to 2,440 yen and Honda down 0.4 percent.

Sony Corp, which climbed on Friday after a brokerage upgrade, lost 0.9 percent to 2,625 yen.

JAL, on the other hand, rose to 111 yen, though market players warned these gains might well be temporary.

"There really isn't a lot of clarity on JAL over the longer term, so while it's fairly natural that it rebounds right now on a sense the stock may have fallen too far last week, any real recovery is impossible until we see some real sense of direction regarding its future," said Okasan's Hirakawa.

Casio Computer Co shares fell 9.1 percent to 691 yen after it lowered its annual outlook to an operating loss of 5 billion yen ($55 million) from its previous forecast for a 15 billion yen profit for the year to March.

Casio cited a bigger-than-expected fall in sales of its mobile phones and digital cameras. (Reporting by Elaine Lies; Editing by Edwina Gibbs)

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