* Nikkei on track for lowest close in two months
* Kirin extends fall after saying Suntory merger is off
(Corrects first paragraph to remove extraneous letters in Sony
stock code)
By Elaine Lies
TOKYO, Feb 8 (Reuters) - The Nikkei average hit its lowest in
two months below 10,000 on Monday, with exporters such as Sony
Corp <6758.T> hurt by a stronger yen, while anxiety over fiscal
problems in Europe continued to dent investor confidence.
Beer maker Kirin Holdings <2503.T> extended falls to more
than 4 percent after saying that it and fellow beer maker Suntory
[] had scrapped a plan to create one of the world's
largest food and beverage makers, citing differences over
governance and a merger ratio. []
But Toyota Motor Corp <7203.T> edged up 0.6 percent after its
president apologised on Friday for safety problems and said the
automaker would bring in outside experts to review quality
controls. []
In a sign that its recall woes continue, though, a dealer
said on Sunday that Toyota has decided to recall its new Prius
hybrid in Japan to fix a braking software glitch. []
"There's continuing worry over Europe's fiscal situation and
investors are now avoiding risk in general, making the Nikkei's
fall today unavoidable," said Noritsugu Hirakawa, a strategist at
Okasan Securities.
"This is especially true after the weekend Group of Seven
meeting which, while they did discuss Greece's fiscal problems,
didn't come up with anything concrete to deal with it. Their
talks just seemed like an exchange of opinions."
The benchmark Nikkei <> was down 0.4 percent or 38.61
points at 10,018.06 after earlier falling as far as 9,952.64, its
lowest point in two months, and appeared on track for its lowest
close in two months as well.
The broader Topix <> lost 0.5 percent to 887.64.
The dollar and yen gained on Friday as persistent worries
about the euro zone's fiscal stability, particularly in countries
like Greece and Portugal, pushed investors further away from
riskier assets.
On Monday the euro was down 0.5 percent at 121.75 yen
<EURJPY=>, after falling as low as 120.64 yen on Friday to its
lowest since Feb. 24, 2009. The dollar was trading around 89.27
yen <JPY=> after earlier falling further towards 89 yen.
Investors fret about a stronger yen as it eats into
exporters' profits when they are repatriated. []
Sony Corp <6758.T> slipped 2.3 percent to 3,015 yen, while
Honda Motor Co <7267.T> declined 1.1 percent to 3,065 yen.
Panasonic <6752.T> lost 5.2 percent to 1,319 yen after market
analysts said UBS had downgraded the stock to "neutral" from
"buy", with additional downward pressure from the yen.
The move came even though the electronics maker reported on
Friday that its quarterly profit jumped more than threefold to
the highest level in five quarters as it cut costs and enjoyed
robust TV sales, and lifted its outlook to beat market
expectations. []
(Editing by Michael Watson)
