* Nikkei slips on profit-taking after last week's 8-mth high
* Yen hovers near 2-week high vs dlr, weighs on exporters
* Mitsubishi Estate up, says interested in buying REIT
* Laox surges, Nikkei says Chinese firm to buy 30% stake
* Defensive sectors hold firm
By Masayuki Kitano
TOKYO, June 18 (Reuters) - Japan's Nikkei average fell 1.8
percent on Thursday, pulling away from last week's eight-month
high as investors booked profits due to uncertainty about the
prospects for a further pickup in the economy.
Big banks such as Mizuho Financial Group <8411.T> tracked
their U.S. peers lower, while exporters such as Honda Motor Co
<7267.T> fell as the yen hovered near a two-week high versus the
dollar.
Mitsubishi Estate Co Ltd <8802.T> bucked the trend, rising
0.5 percent to 1,568 yen after Japan's second-biggest developer
told Reuters on Wednesday it is interested in buying a real
estate investment trust (REIT) in Japan and is preparing to
launch a property investment fund in the United States.
[]
"It seems like a pull-back phase. People who want to take
profits are starting to appear," said Koichi Ogawa, chief
portfolio manager at Daiwa SB Investments.
"Since risk assets have been performing well, there are moves
around the world toward re-balancing and profit-taking," he said.
While there has been a recovery in factory production in
Japan as inventory adjustments progressed, there are doubts about
the outlook for final demand, including capital expenditure and
personal consumption, Ogawa said.
The Nikkei <> ended morning trade down 177.37 points at
9,663.48.
The benchmark has pulled away from an eight-month closing
high of 10,135.82 reached last Friday, but is still nearly 38
percent above a trough hit in early March.
The broader Topix <> fell 1.7 percent to 907.23.
Investors and market analysts said the Nikkei had been due
for a fall after its three-month rally, but rapid declines seemed
unlikely at this stage.
"In Japan, the price earnings ratio has risen to around 40,
compared to around 25 to 26 for Taiwan, and there had been buying
that exceeded actual conditions," said Hideyuki Ishiguro, a
supervisor in Okasan Securities' investment strategy department.
The Nikkei is likely to be supported at its 25-day moving
average, which is now near 9,600, Ishiguro said. If that support
is breached it could fall towards the 200-day moving average near
9,100, but declines beyond that seem improbable, he said.
"The economy's level may be low but it is clearly headed
toward improvement," Ishiguro said.
The dollar stood at 95.77 yen <JPY=> after hitting a two-week
low of 95.51 yen earlier this week.
That hurt exporters such as Honda, which fell 3.6 percent to
2,580 yen, while Canon Inc <7751.T> was down 2.8 percent at 3,110
yen.
Mizuho Financial Group <8411.T>, Japan's second-largest bank,
fell 3.6 percent to 242 yen, and top-ranked Mitsubishi UFJ
Financial Group <8306.T> fell 3.3 percent to 584 yen.
Cyclical sectors such as construction <.ICNS.T> and sea
transport <.ISHIP.T> declined, while defensive sectors such as
foods <.IFOOD.T> and pharmaceuticals <.IPHAM.T> held firm.
Laox Co <8202.T> climbed by its daily limit, surging 83.3
percent to 66 yen, after the Nikkei business daily said the
struggling consumer electronics retailer is holding discussions
with Chinese retail chain operator Suning Appliance Co
<002024.SZ> on an equity deal that would make it the first big
Japanese retailer to become a Chinese company's affiliate.
[]
In U.S. trade, the Nasdaq rose slightly on the back of
technology shares, while the Dow and S&P 500 both fell about 0.1
percent as U.S. bank shares took a hit from a debt ratings
downgrade and uncertainty over Washington's extensive proposals
for banking-industry reform. []
Trade was subdued, with 1.3 billion shares changing hands on
the Tokyo Exchange's first section compared with last week's
morning average of 1.5 billion.
Declining shares outnumbered advancing ones 1,166 to 392.
