* Financial sector, profit-taking dent overall market
* Trade cautious on policy uncertainty, before 5-day holiday
By Aiko Hayashi
TOKYO, Sept 18 (Reuters) - Tokyo's Nikkei average fell 1.2
percent on Friday, hurt by financials after consumer finance firm
Aiful Corp <8515.T> said it would ask creditors to push back
repayments, while exporters such as Advantest Corp <6857.T> lost
steam after a strong run-up.
Investors took a breather after gains that pushed the Nikkei
to end above its 25-day moving average the previous day, market
players said. Trade was also cautious ahead of a five-day holiday
in Japan from Sept. 19-23.
"Investors who bought stocks yesterday are adjusting
positions as they head into the holiday," said Kenichi Hirano,
operating officer at Tachibana Securities.
In moderate trade, the benchmark Nikkei <> slipped
128.39 points to 10,315.41, after gaining 1.7 percent on Thursday
to hit a one-week closing high.
The broader Topix <> retreated 1 percent to 930.03.
"Investors don't really want to touch financial shares. The
Aiful news came as a slight shock ... and added to uncertainty
in the sector that already existed about the new government's
policies," Hirano said.
Shizuka Kamei, the new minister for banking and market
regulation, has said he would like to introduce a moratorium on
some loan repayments to help small and midsized businesses and
individuals struggling from the economic downturn, sending bank
shares lower. []
FINANCIALS HURT
Aiful was untraded due to a glut of sell orders at 134 yen,
down 27.2 percent from Thursday's close.
Aiful said it would ask creditors to push back repayments on
about $3 billion in debt as it faces difficulty raising funds and
plans for more restructuring. []
Rival lenders Promise Co Ltd <8574.T> tumbled 9.9 percent to
544 yen and Takefuji Corp <8564.T> also sank 9.9 percent to 418
yen.
Shares in Aiful's main creditors Sumitomo Trust and Banking
Co <8403.T> shed 1.5 percent to 470 yen, and Aozora Bank <8304.T>
shed 3.7 percent to 130 yen.
The other financial subindex <.IFINS.T>, which lost 6.3
percent, was the top percentage decliner among subindexes.
Exporters that had gained sharply lost ground, also weighing
on the overall market. Advantest Corp <6857.T> slipped 1.9
percent to 2,365 yen and Kyocera Corp <6971.T> retreated 1.4
percent to 8,040 yen.
But West Japan Railway <9021.T> bucked the market trend and
rose 0.9 percent to 338,000 yen after Deutsche Bank raised its
target price on the company to 394,000 yen from 376,000 yen.
Analyst Seigo Ando said there would only be a limited impact
from new government's policy of scrapping highway tolls and added
that the extension of the Kyushu bullet train planned for the
spring of 2011 will have a greater impact than the market
expects.
Some 1.1 billion shares changed hands on the Tokyo exchange's
first section, in line with last week's morning average.
Declining stocks beat advancing ones by nearly 7 to 1.
(Editing by Joseph Radford)
