RTRS: Nikkei falls 1.4 pct as rising yen hits exporters
By Rika Otsuka
TOKYO, Dec 17 (Reuters) - The Nikkei average slipped 1.4 percent on Wednesday, giving up gains made after the Federal Reserve slashed interest rates to near zero, as a rise in the yen dented shares of exporters such as Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz).
Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) tumbled more than 7 percent on expectations that it will likely issue its third profit warning of the year on Wednesday, after abruptly moving up its year-end news conference by two days. The news conference is set for 3 p.m. (0600 GMT). [ID:nT200162]
Tokyo stocks rose in the morning, with bank shares jumping after the Fed slashed borrowing costs to a record low and pledged it would use all available means to revive the U.S. economy from its deepest recession in generations. [ID:nN21494092]
Concern over Japanese corporate profits soon overtook hopes that the U.S. central bank's aggressive policy moves would support the economy, as the yen crawled towards a 13-year high against the dollar. [FRX/]
"Thinking calmly about the reasons behind the Fed's decision to lower rates to near zero, investors have come to realise how bad the U.S. economy is. It's not the right time to chase shares of Japanese companies," said Norihiro Fujito, general manager of investment research and information division at Mitsubishi UFJ Securities. The benchmark Nikkei .N225 fell 123.01 points to 8,445.01, after rising more than 2 percent earlier. It fell 1.1 percent the previous day.
The broader Topix .TOPX slid 1.1 percent to 819.62.
U.S. stocks rallied after the Fed cut the benchmark federal funds rate by at least three-quarters of a percentage point to a range of zero to 0.25 percent from its current 1 percent. The Dow Jones industrial average .DJI ended up 4.2 percent.
Japanese banking stocks rose, with No. 2 bank Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) climbing 1.3 percent to 233,100 yen, while Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz) rose 2.7 percent to 348,000 yen.
Japan's biggest bank, Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), rose 1.4 percent to 515 yen. Its arm Mitsubishi UFJ Trust & Banking said on Tuesday that it would buy NikkoCiti Trust & Banking, Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) Japanese trust bank. [ID:nT290822]
Shares of Honda dropped 7.6 percent to 1,823 yen, and other automakers were also lower with Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) down 2.3 percent at 2,940 yen.
Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz) slid 4.1 percent to 6,130 yen. (Reporting by Rika Otsuka; Additional reporting by Aiko Hayashi; Editing by Hugh Lawson)
