*Nikkei falls 1.2 percent, Topix sheds 1.5 percent
*Financials drag on continued credit worries after Lehman
*Meiji Seika jumps after merger talks report
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Sept 11 (Reuters) - The Nikkei average slipped 1.2
percent on Thursday, pressured by financial shares on continued
worries about the credit crisis after Lehman Brothers <LEH.N>
failed to announce any firm deals to raise desperately needed
capital.
Hopes that Lehman would announce confidence-building steps
had supported the Nikkei a day earlier but market participants
said they found only disappointment.
"Investors are selling because not even a mouse came out
after the mountains roared and shook," said Fujio Ando, senior
managing director at Chibagin Asset Management.
"We should also brace ourselves for more bad news when other
financial institutions start reporting their June-August
results."
The benchmark Nikkei average <> shed 149.74 points to
end the morning session at 12,196.89. The broader Topix <>
declined 1.5 percent to 1,174.25.
U.S. stocks rose on Wednesday, but financial shares fell
after Lehman posted an large quarterly loss on huge
mortgage-related write-downs and failed to announce any firm
strategies. []
The market largely shrugged off domestic machinery orders
data, with core private-sector orders falling 3.9 percent in
July, slightly less than a 4.3 percent decrease forecast by
economists. []
Masayoshi Okamoto, head of dealing at Jujiya Securities, said
that on top of the global economic slowdown, Japanese stocks face
additional pressure from the country's political problems.
"Japan's political vacuum will gradually become a negative
trading factor for the market," he said.
Prime Minister Yasuo Fukuda quit abruptly last week, the
second premier to resign in less than a year, in the face of a
deadlock where the opposition controls the upper house and can
delay laws. []
The winner of the race to replace outgoing Fukuda is widely
expected to call a general election, perhaps in November.
FINANCIAL STOCKS SOLD
Bank shares dropped, with industry leader Mitsubishi UFJ
Financial Group <8306.T> sliding 3.2 percent to 839 yen, while
No.2 Mizuho Financial Group <8411.T> lost 2.8 percent to 457,000
yen.
Nomura Holdings <8604.T>, Japan's biggest brokerage, skidded
4.9 percent to 1,456 yen.
Shares of Hitachi Ltd <6501.T> dropped 5.5 percent to 727 yen
after Chubu Electric Power Co <9502.T> said it would sue the
electronics maker, seeking $390 million in damages as well as
late payment charges due to problems with a Hitachi-made turbine
at the utility's nuclear plant. []
Shares of Chubu Electric fell 0.6 percent to 2,615 yen.
Hino Motors Ltd <7205.T> shed 3.1 percent to 474 yen after
brokerage Credit Suisse cut its rating on the stock to "neutral"
from "outperform", saying the truck maker will likely miss its
annual operating profit target of 46 billion yen by a large
margin.
On the upside, shares in chocolate producer Meiji Seika
<2202.T> jumped 4.3 percent to 532 yen on a report that it was in
talks with Meiji Dairies Corp <2261.T> to merge. []
Meiji Dairies fell 1.5 percent to 601 yen.
Trade picked up on the Tokyo exchange's first section, with
902 million shares changing hands, above last week's morning
average of 859 million.
Declining shares beat advancing ones by nearly 2 to 1.
(Reporting by Aiko Hayashi; Editing by Chris Gallagher)
