(Adds shares, comments)
By Aiko Hayashi
TOKYO, March 27 (Reuters) - Japan's Nikkei average fell 1.8
percent on Thursday, dragged down by TDK Corp <6762.T> after a
newspaper reported the company would likely miss its profit
forecast due to a stronger yen against the dollar, while
financials fell on worries about the outlook for bank profits.
Exporters such as Toyota Motor Co <7203.T> lost ground on the
firmer yen and concerns about a recession in the United States, a
key destination for Asian exports.
On Wednesday a prominent U.S. analyst cut earnings forecasts
for four big U.S. banks and Deutsche Bank <DBKGn.DE> said credit
market aftershocks could hit its 2008 profits, while European
central bankers warned there was no end in sight to the global
credit crunch.
"The fall in financial stocks isn't stopping, due to more
worries about earnings issues such as subprime-related appraisal
losses. We can't really expect to see a fundamental recovery
anytime soon," said Yusuke Sakai, manager of equities trading at
Mizuho Securities.
"The yen now seems to be comfortable around 100 yen against
the dollar, and investors are fretting over next year's earnings
outlooks for exporters, particularly automakers," he said.
Many auto and tech exporters have assumed a currency rate of
105 yen to the dollar in making profit forecasts for the business
year ending this month.
The benchmark Nikkei average <> was down 225.65 points
at 12,480.98, after gaining nearly 8 percent in the last six
days.
The broader TOPIX index <> shed 1.4 percent or 17.81
points to 1,219.74.
The dollar was trading around 98.79 yen <JPY=>, after
recently hitting a near 13-year low of 95.77 yen.
TDK TUMBLES
Shares of TDK tumbled 6.9 percent to 5,950 yen after the
Nikkei business daily said the electronic components maker is
expected to fall short of its forecast and post a group operating
profit of about 86 billion yen for the year ending this month,
hit by a stronger yen and higher raw materials prices.
Investors have been wary about the strength of the yen
against the dollar as it makes Japanese goods less competitive in
overseas markets and cuts into profits made abroad when brought
back to Japan.
Among automakers, Toyota lost 3.6 percent to 5,070 yen, while
Honda Motor Co Ltd <7267.T> declined 2.8 percent to 2,975 yen and
Nissan Motor Co Ltd <7201.T> dropped 4.1 percent to 846 yen.
Honda is the most sensitive of Japan's "Big Three" auto
makers to swings in U.S. demand. It generates just under half of
its sales from the North American market, compared with about
one-third for Toyota and Nissan.
Sony Corp <6758.T> shed 4 percent to 4,060 yen, and
electronics maker Kyocera Corp <6971.T> also dropped 4 percent to
trade at 8,510 yen.
Banks shares fell with Japan's top lender Mitsubishi UFJ
Financial Group <8306.T> down 2 percent at 878 yen, while No. 2
Mizuho Financial Group <8411.T> gave up 3.3 percent to 382,000
yen and Sumitomo Mitsui Financial Group <8316.T>, the
third-biggest bank, slid 2.3 percent to 695,000 yen.
Separately, Sumitomo Mitsui said on Wednesday it aimed to
list shares in New York in the next three years, as Japan's
third-largest bank looks to expand its push overseas.
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Among the day's gainers were oil and gas field developer
Inpex Holdings Inc <1605.T> and gold and copper producer Sumitomo
Metal Mining Co Ltd <5713.T> following oil and metal price rises
as more investors return to commodities after last week's
sell-off. <CLc1> <XAU=> <HGK8>
Inpex rose 1.8 percent to 1.11 million yen and Sumitomo Metal
Mining gained 1.5 percent to 1,927 yen.
Trade was light on the Tokyo exchange's first section, with
732 million shares changing hands in morning trade, compared with
last week's morning average of 973 million.
Declining stocks outnumbered advancing ones by a ratio of
nearly 2 to 1.
(Reporting by Aiko Hayashi; Editing by Hugh Lawson)
