Nikkei edges lower on weak Wall St, construction machinery makers drop

Thu Feb 21, 2013 1:44am GMT

* Construction equipment makers down on weak Caterpillar
sales
    * GS Yuasa jumps on hopes Dreamliner battery failure issue
will be resolved
    * Focus on U.S. summit, BOJ gov nomination

    By Ayai Tomisawa
    TOKYO, Feb 21 (Reuters) - The Nikkei average edged lower on
Thursday as exporters and construction equipment makers dropped,
tugging the market  slightly below a 52-month high tapped the
previous day following weakness on Wall Street.
     The Nikkei dropped 0.4 percent to 11,425.25. On
Wednesday, the Nikkei rose as high as 11,510.52, also the
highest level since late September 2008.
    Hiroichi Nishi, an assistant general manager at SMBC Nikko 
Securities, said there were more than 40,000 call option 
orders at the 11,500 mark for the past two days, suggesting that
the index faces some resistance from the seller side close to
that level.
    The broader Topix dropped 0.4 percent to 969.56.
    U.S. stocks fell the most in three months Wednesday after
minutes from the Federal Reserve's most recent meeting suggested
the central bank may slow or stop buying bonds sooner than
expected.
    Construction equipment makers were weak, with Komatsu Ltd
 shedding 2.2 percent while Hitachi Construction
Machinery Co Ltd dropped 2.3 percent after Caterpillar
Inc's dealers reported slowing sales for the three-month
period ended in January.
    Exporters were weak, with Panasonic Corp dropping
1.9 percent, Toshiba Corp shedding 1.4 percent and
Fanuc Corp falling 3.1 percent.
    GS Yuasa Corp jumped 6.4 percent after a source
told Reuters that a senior Boeing Co executive will meet
with the head of the U.S. Federal Aviation Administration on
Friday and present a series of measures aimed at preventing
battery failures that grounded its 787 Dreamliner fleet for five
weeks. 
    A second source familiar with Boeing's plans told Reuters
that the company also planned to increase the space between the
cells in the lithium-ion batteries made by Japan's GS Yuasa as a
potential fix..
    The Dreamliner fleet has been grounded for the past five
weeks due to problems with battery failure, compounding
pressures caused by earlier delays in 787 deliveries. GS Yuasa
makes the batteries for Dreamliner.
    Market players said that while the yen weakness has paused,
some investors are buying shares on dips based on individual
news.
    The Nikkei has gained about 30 percent and the yen has
declined some 15 percent against the dollar since mid-November 
driven by bold fiscal stimulus and monetary easing policies
pursued by Prime Minister Shinzo Abe's new government to
reignite the economy.
    "The Nikkei pierced the psychological resistance level of
11,500, but trading volume has stayed low as investors want to
stay on the sidelines before major events," said Yutaka Miura, a
senior technical analyst at Mizuho Securities.
    Miura said investors were cautiously awaiting the outcome of
a meeting in Washington on Friday at which Prime Minister Shinzo
Abe and U.S. President Barack Obama are expected to discuss a
range of issues including economic and trade matters.
    Trading volume has been low with 2.82 billion shares
changing hands on Wednesday and 2.69 billion shares on Tuesday,
compared with last week's average daily volume of 4.03 billion
shares.
    Miura said the low volume was mainly due to a slowdown in
margin trade by retail investors.
    "Investors are also taking a wait-and-see approach before
the government nominates a new BOJ governor next week. Low risk
appetite may also cause the market to fall after seeing that the
U.S. market eased," Miura said.
     The government has delayed nominating a governor by a week,
fanning talk of friction between the prime minister and the
finance minister over who should run the central bank and take
aggressive action to revive the economy.
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