(Adds stocks, details)
By Aiko Hayashi
TOKYO, March 7 (Reuters) - Japan's Nikkei average fell 2.9
percent to a six-week low on Friday as investors sold exporters
such as Sony Corp <6758.T> on a stronger yen and fears of a U.S.
recession, while silicon wafer maker Sumco Corp <3436.T> tumbled
after predicting weaker profits.
Banks such as Mitsubishi UFJ Financial Group <8306.T> also
took a beating after U.S. mortgage lender Thornburg Mortgage Inc
<TMA.N> said it failed to meet a $28 million margin call, the
latest victim of the global credit crisis. [].
Investors shifted funds into the perceived safety of Japanese
government bonds, with the benchmark 10-year yield <JP10YTN=JBTC>
falling as low as 1.325 percent to come in sight of a one-month
low of 1.320 percent hit on Monday.
"Credit fears are spreading. Things like that probably won't
be over after one or two cases and investors are worried there
will be more," said Takahiko Murai, general manager of equities
at Nozomi Securities.
"We now have more pessimists in the market in terms of
whether the U.S. will tip into a recession or it will be just a
temporary slowdown," predicting the Nikkei could fall to the
11,000-12,000 level.
The benchmark Nikkei average <> ended the morning
session down 378.60 points at 12,836.82, hitting its lowest point
since Jan. 23. It fell as much as 3.6 percent at one point. The
broader TOPIX index <> shed 2.6 percent to 1,254.56.
Yumi Nishimura, manager of the investment advisory section at
Daiwa Securities SMBC, said investors were unlikely to push the
market down much further as they wait for U.S. jobs data out
later in the day for further clues on the health of the economy.
"There's a possibility that investors will pick up shares if
the data turn out to be in line with or better than
expectations," she said.
Economists expect the government's non-farm payrolls report
to show the U.S. job market probably rebounded in February from
the previous month's contraction, but not enough to keep the
unemployment rate from rising. []
EXPORTERS, SUMCO SLIDE
Shares of exporters fell sharply after lacklustre U.S. retail
sales data and a report showing that U.S. mortgage foreclosures
hit a record high in late 2007 added to fears that the U.S.
economy is near a recession, which would hurt demand for Japanese
goods.
The dollar's fall to a three-year low of 102.45 yen <JPY=>.
<FXNEWS> [] gave investors another reason to sell auto and
tech exporters, many of which have assumed a currency rate of 105
yen to the dollar in making their profit forecasts.
A stronger yen makes Japanese goods less competitive in
overseas markets and cuts into profits made abroad when brought
back to Japan.
Shares of Sony slipped 4.7 percent to 4,630 yen, automaker
Toyota Motor Corp <7203.T> dropped 3.3 percent to 5,330 yen and
office equipment maker Konica Minolta Holdings <4902.T> tumbled
6.7 percent to 1,268 yen.
Among banks, Mitsubishi UFJ fell 3.4 percent to 869 yen, No.2
Mizuho Financial Group <8411.T> declined 4.4 percent to 396,000
yen and Sumitomo Mitsui Financial Group <8316.T>, the
third-biggest bank, dropped 5.3 percent to 691,000 yen.
Shares of Sumco slid 10.8 percent to 2,065 yen after it
forecast a 22 percent fall in operating profit this fiscal year,
which started in February, due to a stronger yen, softening wafer
prices and a heavier depreciation burden. []
Trade was relatively active on the Tokyo exchange's first
section, with 991 million shares changing hands, compared with
last week's morning average of 964 million. Declining stocks
outnumbered advancers by a ratio of nearly seven to one.
(Reporting by Aiko Hayashi; Editing by Hugh Lawson)
