TOKYO, Nov. 20 (Xinhua) -- Japan's 225-issue Nikkei Stock Average sank below the 9,500 mark for the first time in four months on Friday, losing 51.79 points or 0.54 percent to close at 9,497.68, its lowest close since July 17.
Japan's key benchmark Nikkei was dragged down by tech-shares and exporters, with deficits of the latter attributed to a strengthening yen.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, which is less tech-oriented than the Nikkei, ended a seven-day streak of losses, to close up 1.00 point, or 0.12 percent, to 838.71.
Tech-shares paired losses made on Wall Street overnight by their U.S. counterparts and overall investor sentiment was dashed Friday morning on the government's assessment that the Japanese economy is in a period of deflation for the first time in three years, with no clear government policy on defensive strategies in sight.
"When you think about why shares have been falling, one reason is that with the change in the government, it has become hard to get a good read on economic policy. The key is whether they can come up with a strategy that will convince people that there won't be a double-dip in the economy next year or in the next fiscal year," said Tsutomu Yamada, a market analyst at Kabu.com Securities.
U.S. tech-shares plummeted after the Bank of America-Merrill Lynch cut its 2010 growth outlook for the semiconductor industry on concerns about growing inventory surpluses -- the bank downgraded it's assessment for ten tech-companies, including Intel Corp.
"Technology shares suffered a "double punch'" from Bank of America-Merrill Lynch's bearish fiscal 2010 outlook for the semiconductor sector Thursday and a significant drop in the book-to-bill ratio for U.S. semiconductor equipment orders in October," said Tsuyoshi Segawa, an equity strategist at Mizuho Securities Co.
In trade on Friday, Sony Corp. lost 2.43 percent to 2,410 yen, whilst Sharp Corp. shed 0.90 percent to 989 yen. Chipmaker Elpida Memory lost 2 percent, to 1,129 yen, whilst Advantest Corp., who make devices to test semiconductors, also lost ground Friday, dropping 2.87 percent to close at 2,030 yen at the 3pm bell.
Investors remained circumspect Friday with regard to the continued weakness of the U.S. dollar against the yen, which has trading in the upper 88 yen zone after falling to a one-and-a-half-month low overnight in New York, negating exporters' profits when repatriated from overseas, according to market players.
Honda Motor Corp. shed 0.55 percent to 2,725 yen, whilst Isuzu Motors Ltd. lost 1.32 percent, closing down at 150 yen. Japan's number one automaker Toyota Motor Corp also retreated into negative territory with a loss of 1.43 percent to 3,440 yen. Mitsubishi Motors Corp. lost 3.37 percent to 118 yen, whilst Nissan Motor Co. Ltd. also closed down with a losing 2.18 percent to close the week at 621 yen.
Diversified banking issues saw gains on Friday as a broad range of losses on the Nikkei were partially offset by investor buy-backs of financial issues that had been oversold throughout the week.
Investor sentiment towards financial issues was more optimistic on Friday in contrast to increasing pessimism on Thursday about share issuance to raise capital, sparked by Mitsubishi UFJ Financial Group Inc. (MUFG). The mega bank announced on Wednesday that it had filed a shelf registration with the Kanto Local Finance Bureau to issue up to 1 trillion yen (11.2 billion U.S. dollars) in common shares, at some point between Nov. 26 of this year and Nov. 25, 2010, in an attempt to boost its capital base, raising concerns about the dilution of per-share value.
Other banks like Mizuho Financial Group Inc. were expected to follow suit, according to sources close to the matter.
Whilst the Bank of Yokohama closed flat at 430 yen, Japan's top bank Mitsubishi UFJ Financial Group Inc. gained 1.50 percent to 471 yen. Mizuho Financial Group Inc. rose 1.93 percent to 158 yen, whilst Sumitomo Mitsui Financial Group Inc. advanced 3.49 percent to 2,815 yen.
Housing, land and realty developers closed the week in positive form, with Tokyu Land Corp. up 3.10 percent to 299 yen and Sumitomo Realty and Development Co. Ltd. making a slight gain of 0.06 percent to close at 1,455 yen. Residential building firm Sekisui House Ltd. ended in positive territory, rising 3.78 percent to 777 yen and Mitsubishi Estate Co. Ltd. saw gains of 0.15 percent on Friday to close the week at 1,270 yen.
Japan Airlines Corp. amid ever-growing concerns about liquidation after the nation's transport minister Seiji Maehara stated that court-led bankruptcy proceedings were not out of the question, plummeted 3.06 percent to 95 yen.
Friday's drop was also attributed to reports that the ailing carrier may have to pay more than a billion U.S. dollars to settle derivatives transactions, but JAL denied it was liable for these charges.
Rumors of a private equity company injecting 1.1 billion U.S. dollars into the struggling carrier have, as yet, failed to ignite investor interest.
Meanwhile JAL counterpart, All Nippon Airways Co. Ltd., closed up 1.31 percent to 231 yen ahead of the three day weekend.
Trade was active on Friday with some 2.1 billion shares changing hands on the Tokyo exchange's First section, compared to last week's daily average of 1.7 billion.
Advancing shares outpaced declining ones by 829 to 708.
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