TOKYO, Nov. 17 (Xinhua) -- Japan's 225-issue Nikkei Stock Average closed down 0.6 percent Tuesday amid increasing investor concerns about further corporate equity finance plans and growing uncertainty about government economic policy. The key benchmark Nikkei lost 61.25 points from Monday to close at 9,729.93.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 3.42 points to 857.00, its lowest close since July 13.
Despite the Dow Jones index posting a one-year high after positive retail sales data Monday and the Federal Reserve alluding to maintaining low interest rates, investors remained circumspect as domestic issues such as the rise in corporate share issuance, a stronger yen and growing concern about deflation, kept market activity apprehensive. Investors opted to lock in early gains made as profit taking became pervasive.
"The way it has been recently is that Tokyo shares do not get a straightforward boost from gains in overseas stock markets. What people are looking at pretty closely today is the foreign exchange market, with the dollar having hit levels below 89 yen," said Hideyuki Ishiguro, a strategist at Okasan Securities.
The dollar was flat against the yen, Tuesday at 89.04 yen, a day after the yen hit a one-month high of 88.75 yen.
Embattled by a strengthening yen electronic components maker NEC Corp. lost 3.86 percent to 235 yen, whilst Sony Corp also ended trade in negative territory down 0.19 percent to 2,525 yen. Hitachi Ltd. shed 2.6 percent to close at 262 yen.
Sharp Corporation, however, saw gains of 1.38 percent Tuesday following reports the LCD panel maker will supply light emitting diode (LED) technology to Sony LCD TVs. Shares in Sharp Corp. closed at 1,023 yen.
"There's concern about the new government's economic policies and this is one of the major factors causing negative investor sentiment. Investors have begun to lose patience as they still can't grasp the scale of additional economic stimulus measures," said Masumi Yamamoto a market analyst at Daiwa Securities SMBC Co.
Market insiders are pointing to Japan's economy being driven out of recession by government stimulus measures and initiatives that aren't sustainable over the long-term. A cut in state spending could send the economy spiraling back into recession, coupled with this increased reports about issues of deflation and a conspicuous absence of lucid government initiatives to deal with this are weighing heavily on markets.
National Strategy Minister Naoto Kan has said that his comments made Monday regarding the nation edging towards deflation were in fact based on objective data and weren't merely his own opinion.
"There's talk about government references to deflation, but we're not seeing a lot of concrete plans from them in response to this," said Hiroaki Kuramochi, head of the equity division at Tokai Tokyo Securities.
Despite broad scale negative investor sentiment Tuesday, gains were made by Canon Inc., maker of office automation and electrical equipment, who gained 2.97 percent after statements made by the company on Monday said it plans to buy Dutch copier and printer maker Oce for 730 million euros (1.1 billion U.S. dollars), in a challenge to rivals Ricoh and Xerox. Canon Inc. shares were valued at 3,470 yenat the 3pm close.
Industrial machinery maker Furukawa Co. Ltd ended in positive territory Tuesday, surging 10.53 percent to 102 yen, whilst industrial engineering firm Hitachi Zosen Corp. also climbed 6.15 percent to 122 yen. Japan Tobacco Inc. was another of Tuesday's significant advancers on the Nikkei, climbing 4.56 percent with a closing share value of 261,400 yen.
Japan's largest apparel retailer Fast Retailing Co. Ltd., who surged 5.2 percent in trade Monday, one of the market's biggest advancers, shed 0.91 percent Tuesday, to 17,380 yen, as investors opted to lock in profits as concern about consumer spending mounts against a backdrop of widening economic woes. Department store operator Marui Group Co. Ltd. also lost ground, shedding 3.71 percent to close down at 519 yen.
In a day of active trade some 1.9 billion shares changed hands on the Tokyo exchange's First section compared with last week's daily average of 1.7 billion.
Declining shares outpaced advancing ones by more than 3 to 1.
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