* Apple suppliers hit by disappointing iPhone sales
* Toshiba favoured on news of GE thermal energy tie-up
By Sophie Knight
TOKYO, Jan 24 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
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
"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
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
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.