Japan's Nikkei erases early gains after the yen strengthens

Thu Jan 17, 2013 4:37am GMT

TOKYO, Jan 17 (Reuters) - The Nikkei share average fell on
Thursday, erasing the morning's gains as investors sold futures
during the lunch break after the yen started rising.
    The Nikkei was down 1.4 percent at 10,451.71 in
early afternoon trade after closing up 0.2 percent at the midday
break.
    Traders said that investors sold futures during lunch break,
as sentiment was soured after the yen strengthened to 88.16 yen
against the dollar, compared with 88.79 yen earlier.
    "Asian markets' weakness also dampened the mood," said a
fund manager at a Japanese asset management firm. "There is more
room for a correction as the market has been rising steadily." 
    The MSCI's broadest index of Asia-Pacific shares outside
Japan shed 0.4 percent, while South Korea's
KOSPI fell 0.6 percent and the Hang Seng Index 
slipped 0.4 percent.
    Exporters turned negative, with Canon Inc dropping
0.8 percent, Nikon Corp shedding 1.5 percent and Fanuc
Corp falling 0.6 percent.
    Most of the early-day gains for Honda Motor Co Ltd 
slipped away, leaving it 0.5 percent up compared with 2.3
percent at the midday break. Toyota Motor Corp, which
was up 1.1 percent at the break, was only 0.2 percent ahead.
    The Nikkei has rallied about 22 percent over the past two
months, driven by a softening in the yen after Prime Minister
Shinzo Abe pressured the Bank of Japan to introduce aggressive
policy easing to kickstart the economy and set an annual
inflation target of 2 percent.
    The broader Topix dropped 1.1 percent to 878.64.
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