Japan's Nikkei average looked set to snap a 7-day winning streak on Thursday, sliding 2.3 percent after surprisingly bad U.S. jobs data and an Intel Corp (INTC.O: Quote, Profile, Research, Stock Buzz) revenue warning fanned fears about the U.S. economy. Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz) and other tech shares bought up over the past few days slid, along with carmakers. The exception was Mitsubishi Motors Corp (7211.T: Quote, Profile, Research, Stock Buzz), which shot up 5 percent after the Nikkei business daily reported it will begin supplying electric cars to PSA Peugeot Citroen Group (PEUP.PA: Quote, Profile, Research, Stock Buzz) as early as next year.
Resource linked-shares such as oil and gas field developer Inpex (1605.T: Quote, Profile, Research, Stock Buzz) slid after oil fell 12 percent on Wednesday, its largest percentage fall in 7 years, on an unexpected rise in crude inventories.
Recession fears were heightened by a grim private sector jobs report coupled with the warning from top chip maker Intel, which said its revenue for the fourth quarter would not meet the lowered forecast it had given in November, citing weakening demand for personal computers
"Everyone's been saying the market has factored in bad economic data and poor results, but now we're seeing that this wasn't really true," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
"From here on we may see the real recession, and in that sense, the rise in global stock markets around the end and start of the year may actually have been based on errors of judgment."
The benchmark Nikkei .N225 shed 212.50 points to 9,026.74 after briefly falling below 3 percent and 9,000, snapping its longest winning streak since March-April 2006. The broader Topix .TOPX lost 1.7 percent to 872.80.
Other market players said that while the Nikkei's slide could well be a brief break in a rising trend likely to continue until later this month, the longer-term outlook was bleak. "If the market was reflecting reality today, we wouldn't be at the levels we are now, we'd be near 7,000. There's still a lot of hopes for the new U.S. administration," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.
According to ADP, a private employment service, private employers shed 693,000 jobs in December, up from the revised 476,000 jobs lost in November and far more than economists estimated.
Non-farm payrolls and unemployment data are due on Friday.
RETAILERS, TECH AND OIL
Aeon Co Ltd (8267.T: Quote, Profile, Research, Stock Buzz) pared losses to 1.4 percent and 862 yen after Japan's no. 2 retailer said it may post its first annual net loss in seven years, hit by flagging sales, a writedown at U.S. unit Talbots (TLB.N: Quote, Profile, Research, Stock Buzz) and accounting changes.
Top retailer and convenience store operator Seven & I Holdings (3382.T: Quote, Profile, Research, Stock Buzz) is set to report results after the close.
Tech shares, which climbed sharply the past few days as investors snapped up the beaten-down stocks, rapidly shed gains in the wake of the announcement by tech bellwether Intel.
JP Morgan cut its rating on Kyocera to "neutral" from "overweight" and lowered its price target to 6,500 yen from 8,500 yen. It also cut its target price for Rohm Co Ltd (6963.OS: Quote, Profile, Research, Stock Buzz) and NEC Electronics Corp (6723.T: Quote, Profile, Research, Stock Buzz)
Kyocera lost 5.5 percent to 6,820 yen, Advantest Corp (6857.T: Quote, Profile, Research, Stock Buzz) fell 9.1 percent to 1,486 yen and TDK Corp (6762.T: Quote, Profile, Research, Stock Buzz) slid 5 percent to 3,610 yen.
The grim jobs data weakened the dollar overnight, and while it was slowly clawing back up against the yen it was still trading around 92.82 yen by late morning.
Exporters were dragged lower as a result. A stronger yen eats into profits when overseas earnings are repatriated.
Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) slipped 2.4 percent to 3,230 yen and Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) lost 0.6 percent to 3,180 yen.
Mitsubishi Motors, the most actively traded stock by volume on the main board, rose to 146 yen.
Though New York crude for February delivery clung below $43, depressing resource shares like Inpex, which fell 7.4 percent to 691,000 yen. Trading houses, which are major dealers in energy and have stakes in oil and gas products, fell as well. Mitsubishi Corp (8058.T: Quote, Profile, Research, Stock Buzz), Japan's largest trader, lost 4.6 percent to 1,344 yen, while Mitsui & Co (8031.T: Quote, Profile, Research, Stock Buzz) shed 4.9 percent to 1,001 yen.
Trade slowed on the Tokyo exchange's first section, with 1.1 billion shares changing hands, compared with Wednesday morning's 1.4 billion.
Declining shares outnumbered advancing ones by nearly 4 to 1.
