*Nikkei falls 2.9 pct after 3.3 pct gain on Tuesday
*Firm yen, economy worries weigh on exporters
*MUFG drops after newspaper report about profit estimate cut
(Adds comment, stocks)
By Aiko Hayashi
TOKYO, Oct 22 (Reuters) - The Nikkei average slid 2.9 percent
on Wednesday, dragged down by exporters such as Sony Corp
<6758.T> on a firmer yen and amid fears over a global recession
and deteriorating corporate earnings.
Mitsubishi UFJ Financial Group's <8306.T> shares skidded more
than 6 percent after the Nikkei business daily said Japan's top
lender will sharply cut its net profit estimate for the half
year. []
"The market could decide all the bad news has run its course
if it could draw a picture in which the global economy, including
Japan, would recover in six months or a year," said Yoshinori
Nagano, a chief strategist at Daiwa Asset Management.
"But at the moment, we can't say that scenario seems very
likely."
The Nikkei average <> shed 265.18 points to end the
morning session at 9,041.07, after falling as much as 3.4 percent
at one stage. It finished the previous day up 3.3 percent.
The broader Topix <> declined 3.3 percent to 924.95.
"Poor earnings prospects are preventing the Nikkei average
from fetching further above 9,000, though money markets appear to
have calmed down a bit," said Yoku Ihara, manager at Retela Crea
Securities.
Earnings worries also pushed down U.S. stocks on Tuesday,
though technology shares rallied in after-hour trade after iPod
maker Apple <AAPL.O> reported a stronger-than-expected 26 percent
rise in quarterly profit. []
Trade was light on the Tokyo exchange's first section, with
851 million shares changing hands, compared with last week's
morning average of 1.1 billion.
Declining stocks outpaced advancing ones by more than 5 to 1.
EXPORTERS DOWN, MUFG SLIDES
Shares of Mitsubishi UFJ lost 6.1 percent to 797 yen.
The Nikkei business daily said Mizuho Financial Group
<8411.T> and Sumitomo Mitsui Financial Group <8316.T> are also
finalising plans to cut their earnings outlooks.
Mizuho declined 4.7 percent to 348,000 yen and SMFG fell 5.7
percent at 518,000 yen.
Among exporters, Sony dropped 6.3 percent to 2,530 yen and
Canon Inc <7751.T> fell 2.3 percent to 3,380 yen.
The euro fell as low as 130.17 yen, the lowest since June
2004 as investors bet that interest rates outside the United
States will be cut sharply to try to bolster global growth.
Investors fret over a stronger yen as it curbs exporters'
overseas profits when they are brought back home.
Automakers declined also after the Nikkei business daily said
Toyota Motor Corp <7203.T> will post its first sales decline in a
decade in 2008, with vehicle sales now appearing likely to drop 2
percent below the previous year's levels. []
Toyota fell 0.5 percent to 3,770 yen, while Honda Motor Co
<7267.T> lost 3.1 percent to 2,360 yen.
Shares of major steelmakers such as Nippon Steel Corp
<5401.T> and JFE Holdings <5411.T> lost ground after an industry
body said steelmakers could soon cut output on signs of weakening
demand amid fears of a global recession. []
Nippon Steel dropped 5 percent to 323 yen and JFE Holdings
slid 4.8 percent to 2,365 yen.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
