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Nikkei falls on commodities rout, eyes on US jobs

Published 05/06/2011, 03:33 AM
Updated 05/06/2011, 03:36 AM
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* Nikkei suffers biggest percentage loss since April 12

* U.S. jobs data to determine direction for Nikkei

* Exporters suffer as yen advanced to 79-yen level overnight

By Chikafumi Hodo and Ayai Tomisawa

TOKYO, May 6 (Reuters) - Japan's Nikkei average fell 1.5 percent on Friday as a rout in oil and commodity prices pummelled resource stocks and sent the yen higher, hurting shares of exporters, while caution ahead of U.S. jobs data prompted profit-taking.

The Nikkei suffered its biggest daily percentage loss since April 12 after gaining 4.6 percent over the previous three trading sessions.

A surge in weekly claims for U.S. jobless benefits helped trigger selling after the benchmark index closed on Monday above the 10,000 mark for the first time since the March 11 earthquake. Japanese financial markets were closed between Tuesday to Thursday for public holidays.

"Sharp falls in commodities prices and the yen's firmness prompted selling. Investors saw today as a good opportunity to square off some positions ahead of more corporate earnings next week," Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.

"The Nikkei's rise above 10,000 may have been too rapid, with sentiment in overseas markets deteriorating as prospects for a rate hike in Europe fade and some concerns about the outlook for the U.S. economy are growing," he said.

The benchmark Nikkei ended the day down 145.00 points at 9,859.20 and analysts said support is seen at its 5-day moving average of 9,755.

The broader Topix fell 1.1 percent or 9.05 points to 856.50.

"Worries about the U.S. economy are growing after a series of weak economic indicators, which are undermining Japanese stocks. Tonight's U.S. payroll data will be very important," said Ryosuke Okazaki, chief investment officer at ITC Investment Partners.

The U.S. Labor Department on Thursday said first-time filings for jobless benefits soared to 474,000 last week, the highest level since mid-August 2010.

The surprise jump was attributed to factors ranging from spring break layoffs to the introduction of an emergency benefits program. [ID:nN05259672].

This week's jobs data have caused some economists to pare predictions for April payrolls growth. The median forecast among analysts polled by Reuters is now a 186,000 increase from an earlier 198,000 rise. Payrolls grew by 216,000 in March.

The dollar fell below 80 yen for the first time since March 18, the day central banks intervened to weaken the Japanese currency after it hit a record high. The pair fell to a 7-week low of 79.57 yen Thursday, but later traded around 80.44 on Friday.

Investors were also nervous about taking large positions ahead of a slew of corporate earnings announcement scheduled for next week, including companies such as Toyota Motor and Toshiba .

Sony Corp fell 2.3 percent to 2,262 yen after the company revealed hackers had stolen data on another 25 million user accounts of its PC games system in a second massive security breach for the consumer electronics giant. [ID:nN02249883]

Among exporters hurt by a stronger yen, Toyota Motor fell 2.4 percent to 3,210 yen and Canon dropped 2.3 percent.

Honda Motor fell 4.7 percent to 3,075 yen after Japan's No.3 automaker expanded an earlier recall of Honda and Acura vehicles over airbags that could use with too much pressure by another 833,000 vehicles. [ID:nN03127142]

Shares of resource-related companies such as Inpex and JX Holdings fell sharply reflecting plunges in oil and other commodities.

Brent crude oil dived a record $12 a barrel and silver slumped by nearly $5, its biggest one-day decline since 1980, though they stabilised on Friday.

Shares of Inpex, Japan's top oil and gas developer, fell 6.2 percent to 563,000 yen, while JX Holdings , which owns Japan's top copper smelter Pan Pacific Copper and Japan's top oil refiner JX Nippon Oil & Energy, fell 3.4 percent to 542 yen.

Volume totalled 1.91 billion shares on the Tokyo stock exchange's main board, higher than last week's average daily volume of 1.73 billion. (Editing by Edwina Gibbs)

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