September 8, 2017 / 3:10 AM / a year ago

Nikkei down, Topix flat as investors brace for N. Korea holiday

* Nikkei slips but broader market flat

* Investors on sidelines ahead of North Korea holiday

* Food company shares down, may be hit by ECB tapering

By Hideyuki Sano

TOKYO, Sept 8 (Reuters) - Japan’s Nikkei share average dipped near four-month lows on Friday while the broader Topix was almost flat as investors held off buying on concerns North Korea could launch another missile test on its important national holiday over the weekend.

The Nikkei fell 0.4 percent to 19,322.74, near Wednesday’s four-month low of 19,254. The broader Topix was flat at 1,597.87.

Japanese shares have been dragged down by tensions over North Korea’s nuclear and missile programmes, following its missile launch on Aug. 29 and nuclear test on Sept. 3.

The biggest talking point in the market was what North Korea will do on its national holiday on Saturday given it has tended to conduct missile tests on the country’s important holidays.

North Korea on Thursday pledged to take “powerful counter measures” to respond to U.S. pressure or any new sanctions against it over its missile programme, accusing Washington of wanting war.

“Since we all know that North Korea has a holiday on Saturday, it’s hard to buy stocks now. That’s especially so for people like us, who manage funds for customers,” said an equity investment manager at a Japanese life insurance company.

Some were hopeful that the market’s sentiment will improve after the weekend, barring shocking moves from Pyongyang.

“Most investors will be on the sidelines until Sept 9,” said Soichiro Monji, chief strategist at Daiwa SB Investments.

“But given that the U.S. debt ceiling is already extended, I expect to see a rebound next week.”

The market mostly shrugged off a revision in Japan’s second quarter GDP figures.

The downgrade to an annualised rate of 2.5 percent in April-June from an initial estimate of 4.0 percent growth was widely expected after data used to revise GDP figures showed capital spending growth in April-June slowed from the previous quarter.

Food companies were the worst performers among sectors, falling 1.0 percent.

As they are considered to be defensive shares and have been bought as an alternative to low-yielding bonds, some investors may be selling them after the European Central Bank indicated that it could wind back its stimulus, said Tomoichiro Kubota, senior market analyst at Matsui Securities.

ECB President Mario Draghi signalled the central bank could make a decision on the future path of its stimulus in October even as he cautioned that the euro’s strength was already weighing on inflation.

On the other hand, many exporters shares were firm despite the yen’s strength. Transportation equipment index, comprised mainly of carmakers, rose 0.4 percent.

Toyota Motor rose 0.3 percent while car part maker Denso gained 1.8 percent. (Editing by Jacqueline Wong)

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