(Adds stocks and comments)
By Taiga Uranaka
TOKYO, March 31 (Reuters) - Japan's Nikkei average fell 1.5
percent on Monday, with investors locking in profits following
last week's sharp gains and before a raft of key economic data.
Financial shares were under selling pressure, with Japan's
third-largest bank Mizuho Financial Group <8411.T> down 3.1
percent, after their U.S. peers fell on concerns about potential
dividend cuts.
Trading house Marubeni Corp <8002.T> plunged more than 6
percent after Lehman Brothers <LEH.N> said it planned to sue
Marubeni for repayment over a case of suspected fraud.
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"Friday's gain was simply dressing, so it would be naturally
followed by profit-taking," said Fumiyuki Nakanishi, group
manager of investment research department at SMBC Friend
Securities.
He was referring to institutional investors' buying to boost
the value of their portfolios before Japan's fiscal year wraps up
on Monday.
Toyota Motor Co <7203.T> fell 3.6 percent to 5,050 yen,
becoming one of the top drags on the Nikkei after a 2.5 percent
gain on Friday.
"Investors found it hard to make moves following falls on
Wall Street and ahead of (the Bank of Japan's) tankan and
employment data," said Noritsugu Hirakawa, strategist at Okasan
Securities.
Investors will be closely watching the BOJ's quarterly tankan
survey of corporate sentiment on Tuesday to gauge how much the
global market turmoil has affected the Japanese economy.
Among other key data, a U.S. jobs report on Friday will be
watched for further clues on the health of the world's largest
economy.
The benchmark Nikkei ended the morning session down at
12,627.83. The broader TOPIX fell 1.8 percent to 1,221.23.
The market shrugged off early data showing that Japan's
industrial output fell less than expected in February.
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DOUBLE WHAMMY FOR MARUBENI
Marubeni, one of Japan's top five trading houses, tumbled to
729 yen after a person briefed on the matter said Lehman Brothers
had been fleeced of more than $355 million in a case that the
U.S. investment bank believes was perpetrated by two employees at
Marubeni. []
Marubeni's stock was also hit by the trading house's
announcement on Friday that its U.K. financial subsidiary would
write down 17.6 billion yen after its portfolio value fell
sharply amid turmoil in credit market.
Lehman is trying to recover a loan to a fund headed by
Asclepius Ltd -- a now-bankrupt unit of LTT Bio-Pharma Co. Lehman
had believed the money was backed by Marubeni.
Marubeni as well as rival trading houses and nonferrous metal
shares were also sold due to falls in commodities such as copper.
Mitsui & Co Ltd <8031.T> slid 3.3 percent to 2,035 yen and
Itochu Corp <8001.T> lost 3.5 percent to 984 yen.
Gold and copper producer Sumitomo Metal Mining Co Ltd
<5713.T> fell 4.1 percent to 1,873 yen. Rival Mitsubishi
Materials Corp <5711.T> slid 4.6 percent to 433 yen.
Japan's three largest banks all fell, with Mizuho Financial
Group down at 374,000 yen.
Adding to investor concerns about the U.S. financial sector,
Oppenheimer & Co analyst Meredith Whitney said Citigroup Inc
<C.N>, Wachovia Corp <WB.N> and other U.S. banks are likely to
announce dividend cuts in April because their earnings will not
support currently scheduled payouts.
Trade was light, with 690 million shares changing shares,
compared with last week's morning average of 740 million.
Declining shares beat advancing ones by five to one.
(Editing by Chris Gallagher)
