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Nikkei down 0.7 pct, U.S. bank worries weigh

Published 10/14/2010, 09:53 PM
Updated 10/14/2010, 09:56 PM

* Investors lock in profits after jumping 2 pct on Thurs

* Solid technical support seen at 25-day MA of 9,458

TOKYO, Oct 15 (Reuters) - Japan's Nikkei average fell 0.7 percent on Friday, hurt by broad profit-taking after gaining sharply a day earlier and as financial stocks tracked their Wall St peers lower on worries about a widening U.S. foreclosure crisis.

Among banks, Mizuho Financial Group fell more than 4 percent and Sumitomo Trust and Banking dropped more than 3 percent.

"Market players are concentrating on adjusting positions after posting strong gains yesterday," said Kenichi Hirano, operating officer at Tachibana Securities.

"Yesterday's big rise was somewhat artificial as buying in the futures market drove up the Nikkei. Today we are watching whether the market can regain its strength again."

Traders said Thursday's gains were partly due to active buying by one European institution, which bought Nikkei futures possibly on behalf of overseas commodity trading advisers (CTAs) and hedge funds who were doing short-term trades.

By mid-morning trade, the benchmark Nikkei was trading down 70.10 points at 9,513.41, while the broader Topix fell 1 percent to 828.80.

On Thursday, the Nikkei rose 1.9 percent, its best daily performance in a month, buoyed by a jump in resource stocks as dollar weakness fuelled a climb in commodity prices.

The dollar stood at 81.40 yen in Asian trade after it dropped to a 15-year low of 80.88 yen on EBS on Thursday despite wariness about Japanese intervention, and looked set to challenge its record low of 79.75 hit in April 1995.

Technical indicators showed the Nikkei is likely to find support at several areas, including the 25-day moving average, now at 9,458, while its next upward targets are its recent peaks around 9,700, marked this month, and 9,800, hit in July. (Reporting by Chikafumi Hodo; Editing by Edwina Gibbs)

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