* Nikkei and Topix both down 0.7 pct
* Nikkei heads for 6th straight session of loss
* Suzuki Motor climbs on strong H1, keeps full-year outlook
By Dominic Lau
TOKYO, Nov 12 The Nikkei average slipped to a
four-week low on Monday, heading for a sixth session of decline,
hurt by weak Japanese GDP data and concerns over U.S. fiscal
woes that threaten to push the world's largest economy into
Exporters, which will be hurt most if the United States
slips into recession, took a beating. Toyota Motor Corp
, Honda Motor Co, Canon Inc and Nikon
Corp were down between 1 and 1.4 percent.
Sony Corp shed 1.7 percent after Moody's Investors
Service cut the consumer electronics maker's debt rating to
Baa3, just one notch above 'junk' rating, citing shrinking
demand for its products.
By the midday break, the Nikkei lost 0.7 percent to
8,693.29, although upbeat data from the United States and China
helped limit losses. If the index ends in negative territory, it
would be a sixth straight day of decline and the longest losing
streak since July.
"It's partly due to the GDP," a trader at a foreign bank
said. "It's also partly the feeling that the yen is getting
stronger again, partly the concern over the (U.S.) 'fiscal
Japan's economy shrank 0.9 percent in the three months to
September, marking the first contraction in three quarters,
adding to signs that slowing global growth and tensions with
China are nudging the world's third-largest economy into
In the United States, the political bickering over $600
billion of spending cuts and tax increases taking effect in the
new year, known as the 'fiscal cliff', also threatened to tip
the world's largest economy into recession.
The concerns have been weighing on global equities,
including Japanese stocks, particularly as they have also been
adding upward pressure to the yen.
Adding to the gloom, company earnings have been weak this
quarterly reporting season, with 59 percent of 141 Nikkei
companies that have reported so far undershooting market
expectations, according to Thomson Reuters StarMine. That
compared with 54 percent in the previous quarter.
But the market got some support from better-than-expected
U.S. consumer sentiment, which rose to its highest level in more
than five years in November, and Chinese exports growth which
hit their fastest pace in five months.
The broader Topix index fell 0.7 percent to 725.37,
also hitting a four-week low. Trading on the Topix was light,
w i th volume at 40 percent of its full daily average for the past
Hisao Matsuura, equity strategist at Nomura Securities, said
if the sentiment worsened, the Nikkei could test a low struck in
June of 8,238.96 points, 5.2 percent below where the index ended
the moring session.
He said investors were unlikely to enter the market due to
the concerns over the United States, where a compromise has to
be found with Congress over cutting the fiscal deficit,
otherwise $600 billion worth of tax hikes and spending cuts will
kick in early next year, putting the economy at risk of
SUZUKI, MAZDA OUTPERFORM
Among the gainers were Suzuki Motor Corp, which
surged 4.8 percent after the automaker said nine-month net
profit rose 30.9 percent and kept its full-year outlook, saying
that a decline in sales in China on anti-Japan sentiment would
be offset by gains in Southeast Asia.
Mazda Motor Corp climbed 2.9 percent after it and
Toyota said Mazda would produce Toyota vehicles for the North
American market at its new plant in Mexico.
The benchmark Nikkei is still up 2.8 percent this year,
trailing a 9.7 percent gain in the U.S. S&P 500 and a
10.5 percent rise in the pan-European STOXX Europe 600.
Credit Suisse said in a report it was keeping Japanese
stocks at 'benchmark' in its global equities model portfolio but
noted that Japan's monetary policy remained tight and earnings
momentum was poor.
Credit Suisse said it was kept from going underweight by the
probability that the Liberal Democratic Party will win power at
elections expected next year, very cheap asset valuations and
the cyclical nature of many Japanese companies.
Japanese equities carry a 12-month forward price-to-book
ratio of 0.83, much cheaper than the S&P 500's 1.9 and STOXX
Europe 600's 1.38, data from Thomson Reuters Datastream showed.