* Exporters, financials suffer as yen strengthens
* Strategists see support for Nikkei at 9,500
* Sony ends up 0.6 pct, report to slash 10,000 jobs
* Trading volume on Topix lowest since Jan. 16
* Market risk averse ahead of end of BOJ meeting
By Mari Saito
TOKYO, April 9 (Reuters) – Japan’s Nikkei average fell 1.5
percent to post its fifth straight day of losses on Monday, with
a weak U.S. jobs report raising fresh concerns over recovery in
the world’s largest economy and as a stronger yen weighed on
exporters.
The Nikkei has dropped 5.3 percent since April 2 , marking
its longest losing streak since late November.
“We are already in the 9,500s now (on the Nikkei). We will
see if that 9,500 (level) provides support. If not, our
technical analyst is looking for the 9,300 handle (for
support),” said Naomi Fink, Japan equity strategist at
Jefferies.
“It’s an interim correction. We went, perhaps, a little too
far, too fast.”
The benchmark Nikkei ended down 142.19 points at
9,546.26, its lowest closing level since Feb. 21. S trategists
said the benchmark’s 13-week moving average, near 9,509, as well
the 50 percent retracement of its fall from February to November
last year, near 9,508, acted as support.
Last Friday’s U.S. non-farm payroll data disappointed
investors, with the latest data showing 120,000 jobs added in
March, worse than the forecast gain of 203,000 jobs. The
unemployment rate dipped to 8.2 percent from February’s 8.3
percent.
Despite the five-day losing streak, some strategists said
the market correction was unlikely to last.
“There continue to be high expectations for Japan’s
corporate earnings recovery based on current forex levels, so I
don’t think there is reason to continue the sell-off for much
longer,” said Hiroyuki Fukunaga, CEO of Investrust.
Data from Thomson Reuters I/B/E/S pointed to an improved
earnings outlook for the Topix, with its earnings momentum –
analysts’ upgrades minus downgrades as a total percentage –
rising to 3.5 percent in March from minus 6.6 percent in
February.
“We’re going to see the first of the U.S. corporate results
this week, so if we see strong numbers from the likes of Alcoa
, I think that will cancel out the negative surprise from
the U.S. jobs report,” Fukunaga said.
U.S. aluminum giant Alcoa Inc will kick start the Wall
Street earnings season after the bell on Tuesday, followed by
financial heavy weights JP Morgan Chase & Co and Wells
Fargo & Co later this week.
In Tokyo, exporters and financials came under pressure after
they led the Nikkei rally in January to March, when the index
gained more than 19 percent to log its best first-quarter
performance in 24 years.
Honda Motor Co Ltd lost 2.4 percent, Nissan Motor
Co Ltd fell 3.4 percent and TDK Corp declined
1.7 percent, while Japan’s top investment bank Nomura Holdings
dropped 2 percent.
Sony Corp bucked the overall trend to climb 0.6
percent after a report said the company would cut about 6
percent of its global workforce as early as year-end to turn
around its business.
Car-parts maker Press Kogyo Co sagged 4.6 percent
after Deutsche Bank downgraded it to “hold” from “buy”, saying
near-term growth prospects have already been priced in.
The broader Topix dropped 1.5 percent to 813.69.
Trading volume on the main board was thin, with 1.6 billion
shares changing hands, its lowest daily volume since Jan. 16.
NOT-SO-MANIC MONDAY
Trading was particularly light on Monday, with stock markets
in Australia, Hong Kong and the UK closed for Easter Monday.
Investors also avoided risk ahead of the Bank of Japan’s
two-day policy meeting ending on Tuesday.
The BOJ is expected to refrain from easing monetary policy,
holding fire until a more thorough assessment of the economy two
weeks later which may show further action is needed to nudge
inflation up towards its 1 percent target. The central bank will
hold another meeting on April 27.
Stock valuations on the Nikkei at the Friday close imply an
earnings-per-share compound annual growth rate of 0.5 percent
for the index as a whole over the next five years, data from
Thomson Reuters StarMine showed.
That means the market is pricing the index as if EPS growth
will be 0.5 percent every year over the five-year period, on a
compound basis. That is down from 1.5 percent in mid-March, but
up from minus 0.8 percent in January.
Implied five-year EPS CAGR for the S&P; 500 is 4.0
percent.
However, the Nikkei offers a dividend yield of 2.4 percent,
more than the S&P; 500’s 2 percent, StarMine data showed.
