* Nikkei drops for 6th day
* Nikkei may fall to 8,534 - analyst
* Suzuki Motor climbs on strong H1, keeps full-year outlook
By Ayai Tomisawa and Dominic Lau
TOKYO, Nov 12 Japan's Nikkei stock average fell
for a sixth straight day and closed at a four-week low on
Monday, hurt by a strong yen and worries about a possible U.S.
fiscal crisis that may push the world's largest economy into
Data showing Japan's economy had shrunk 0.9 percent in the
three months to September - its first contraction in three
quarters - further dulled investors' appetite for risk, as it
highlighted how slowing global growth and tensions with China
are nudging the world's third-largest economy into recession.
The Nikkei fell 0.9 percent to 8,676.44, and the
broader Topix dropped 1.1 percent to 722.58.
Investors are concerned about the ability of the
administration of U.S. President Barack Obama to strike a
compromise with Congress over cutting the fiscal deficit,
otherwise $600 billion worth of tax hikes and spending cuts will
kick in early next year.
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 1.2 and 1.8 percent.
Sony Corp shed 2.6 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.
"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
A stronger yen will also hurt exporters, and traders said
the Bank of Japan had so far failed to convince the market its
stimulus measure were having an effect on the currency.
"Investors are thinking that the yen may not weaken even if
the central bank eases monetary," said Hiroyuki Fukunaga, chief
executive of Investrust, adding that in the next few weeks the
Nikkei may test a support level of 8,534, a closing price of
Bank of Japan Governor Masaaki Shirakawa said the central
bank will continue to pursue powerful monetary easing, taking
into account the risk that rises in the yen can hurt Japan's
But he stressed that flooding markets with cash alone won't
nudge up prices in countries like Japan where interest rates are
already near zero, repeating his call for government efforts to
boost growth potential such as deregulation and structural
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.
SUZUKI, MAZDA OUTPERFORM
Among the gainers were Suzuki Motor Corp, which
surged 4.5 percent after the automaker's nine-month net profit
rose 30.9 percent. Suzuki also maintained 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 1.0 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 2.6 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.
Volume was low, with 1.26 billion shares changing hands on
the Tokyo stock exchange's first section, lower than last week's
average daily volume of 1.59 billion shares.