Nikkei moves sideways after sharp losses, Apple suppliers sag
* Apple suppliers hit by disappointing iPhone sales * Toshiba favoured on news of GE thermal energy tie-up By Sophie Knight TOKYO, Jan 24 (Reuters) - Japan's Nikkei share average seesawed in early trade on Wednesday as investors sought bargains after three straight days of declines, but disappointing sales figures for Apple put Japanese suppliers for the iPhone under pressure. Ibiden Co Ltd, which makes printed circuit boards for the iPhone, slid 5.7 percent, while Foster Electric Co Ltd , Taiyo Yuden Co Ltd and Sharp Corp, slipped between 1 percent and 2.5 percent. Apple shares fell more than 10 percent in extended trade after it said it had sold 47.8 million iPhones, lower than the roughly 50 million predicted by Wall Street analysts, while first quarter revenue of $54.5 billion slightly undershot estimates, according to Thomson Reuters I/B/E/S. The Nikkei nudged down 0.2 percent to 10,464.43 after shedding 2.1 percent on Wednesday to a three-week closing low, as investors locked in profits after disappointment the Bank of Japan did not announce more immediate action on Tuesday. "Apart from the bad news about Apple, there's a lack of incentives at the moment as everyone is waiting for earnings, so although the bottom is pretty firm it's not likely to shoot up any time soon," said Masayuki Doshida, senior market analyst at Rakuten Securities. With Japan's earnings season beginning in earnest next week, firms reporting early were in focus. Yaskawa Electric Corp fell as much as 8.8 percent to a one-month low after the company reported a 39 percent drop in operating profit in the nine months to December, hurt by weak demand for servo motors in China and Europe. Toshiba Corp, which is also an Apple supplier, was ahead of the market, gaining 1.1 percent after the Nikkei business daily said it will discuss forming a joint venture with General Electric Co to develop and sell combined cycle gas turbines. "Toshiba's thermal energy division is much larger than the Apple supplies part, so investors are more likely to be cheered by the GE news than focused on Apple's results," Doshida said. WHERE TO NOW? The Nikkei has dropped 4.2 percent from a 32-month high of 10,952.31 hit on Jan. 15, the peak of a steep rally starting in mid-November, when then-incoming leader Shinzo Abe began calling for a weaker yen and aggressive monetary easing. The Bank of Japan responded to pressure from Abe by announcing a 2 percent inflation target at its policy meeting on Tuesday. It also committed to open-ended easing from 2014, a decision that disappointed some investors hoping for more immediate action. However, many analysts are still bullish on the Japanese market. Goldman Sachs said the Topix index could rise as high as 1,270 if the yen weakened to 100-110 against the dollar, in a report published on Thursday. The broader Topix lost 0.4 percent to 884.50 on Thursday morning. Goldman Sachs revised its 12-month estimate for the index to 1,100 to 1,000, assuming 88 yen to the dollar, saying that the economy should be given a boost by the 10 trillion yen ($113 billion) fiscal stimulus plan announced by the Abe government. "While foreign buying has accelerated, total cash and futures buying is not yet excessive, and while "underweight Japan" gaps have narrowed, most international equity funds remain underweight," the report said.
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