(Adds stocks, details)
By Elaine Lies
TOKYO, May 1 (Reuters) - Japan's Nikkei stock average shed
0.7 percent on Thursday as investors moved to lock in profits
after the Federal Reserve left unclear the outlook for further
rate cuts, with banks such as Mizuho Financial Group <8411.T>
slipping after several days of strong gains.
The market was zeroing in on earnings, pushing up firms like
Komatsu Ltd <6301.T> after the world's No. 2 maker of
earth-moving equipment on Wednesday booked a 4 percent gain in
quarterly profit and forecast 5 percent growth this year on
strong demand for construction in China. [ID:nT1793]
Investors were struggling to interpret the decision by the
Federal Reserve, which cut interest rates by the predicted 25
basis points but failed to deliver an unequivocal statement that
the worst was over for the economy.
"They couldn't be clear in their statement, this isn't the
time to be clear," said Hiroaki Osakabe, fund manager at Chibagin
Asset Management.
"There are still question marks about the economy so they
decided to take a neutral stance."
Others pointed to better-than-expected U.S. GDP figures as a
sign that concerns about the economy might be exaggerated, noting
that the market was more likely simply searching for direction
with many world markets closed for a holiday on Thursday.
With an extended holiday approaching in Japan and key U.S.
April jobs data due out on Friday, market players were averse to
taking on fresh positions, leading to profit-taking, said
Mitsushige Akino, chief fund manager at Ichiyoshi Investments.
In addition, a sense appeared to be growing among investors
that any break over 14,000 by the Nikkei -- a level it briefly
touched on Monday for the first time in two months -- is unlikely
without strong, fresh positive factors.
"Nothing in the environment's really changed since yesterday,
and I don't think you can say the Fed decision is having a strong
direct impact. There's really just no reason to buy," Akino
added.
The Nikkei <.N225> lost 93.14 points to 13,756.85, while the
broader Topix <.TOPX> was down 0.9 percent at 1,346.45.
BANKS, PROPERTY FIRMS SLIDE
One exception to the market's focus on earnings were banks,
which market players said were moving mainly on sentiment as
profit-taking kicked in, with property firms moving in tandem.
Mizuho Financial fell 4.1 percent to 518,000 yen, while top
lender Mitsubishi UFJ Financial Group <8306.T> fell 3.2 percent
to 1,108 yen. Sumitomo Mitsui Financial Group <8316.T> was down
2.7 percent at 871,000 yen.
Mitsubishi Estate Co Ltd <8802.T>, Japan's second-biggest
developer, forecast on Wednesday 10 percent annual operating
profit growth, bolstered by tight supply of prime office space in
Tokyo and the consolidation of two units onto its books
[ID:nT344923].
It fell 4 percent to 2,900 yen, snapping an extended rising
streak. Rival Mitsui Fudosan <8801.T> slid 1.9 percent to 2,570
yen despite projecting operating profit to rise 12 percent to 200
billion yen ($1.9 billion) in the year to March 2009, in line
with consensus forecasts after posting a 7 percent climb for the
January-March quarter to 77.2 billion yen.
Sumitomo Realty & Development Co <8830.T> slid 3.3 percent to
2,515 yen.
Trade was modest on the Tokyo exchange's first section, with
791 million shares changing hands, in line with last week's
morning average.
Declining stocks beat advancers by more than two to one.
(Reporting by Elaine Lies; Editing by Chris Gallagher)
(([email protected]; +81 3 6441 1807; Reuters
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