TOKYO, Feb 1 (Reuters) – Japanese shares edged down on Friday, dragged by worries about the U.S. economy ahead of key jobs data and a slide in Sony Corp shares to a 14-month low after the electronics giant lowered its profit forecast. Additional downward pressure came from Mizuho Financial Group and other banks after Mizuho reported a fall in quarterly profit and slashed its outlook for the second time, prompting HSBC to cut its rating to “neutral” from “overweight”.
Sony tumbled 8.2 percent to 4,790 yen, its lowest since December 2006, after posting a small rise in quarterly operating profit and cutting its outlook as weaker markets eat into its investments and a firmer yen hurts overseas sales.
Although Sony was one of the largest drags on the Nikkei by volume weight, some market participants said the situation was not as grim as it might seem and that the stock could be oversold.
“Certainly this wasn’t good news for Sony, but it also isn’t terrible,” said Yumi Nishimura, manager at the investment advisory section of Daiwa Securities SMBC, noting that compared to the Nikkei overall it is still doing well.
“While it’s fallen, it’s still not that far off the low it hit last August, whereas the Nikkei is quite a lot lower.”
Banks started off the day on a positive footing, their Wall Street peers having gained after MBIA, the No. 1 U.S. bond insurer, said it had enough cash to run its business of guaranteeing payments on corporate and municipal bonds. Standard & Poor’s also told the company it had enough capital to keep its triple-A rating, MBIA executives said.
But longer-term worries about the U.S. economy, especially ahead of jobs data due out at 1330 GMT, were prompting many investors to square their positions. “Wall Street may have risen yesterday, but many of the economic indicators that have been coming out recently are poor, raising concerns about the jobs data,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
The benchmark Nikkei was down 0.7 percent at 13,497.16, a loss of 95.31 points. The broader TOPIX lost 0.7 percent to 1,336.86. BANK WORRY Though the MBIA news bolstered Wall Street, Tokyo market participants said many worries remain.
“There’s still a lot of uncertainty about bond insurers overall. Add in yesterday’s disappointing results from Google, and you really can’t say the U.S. market has settled down,” Yamagishi added.
Shares of Mizuho Financial Group dropped 5 percent to 473,000 yen after the bank reported a 65 percent fall in quarterly profit on Thursday, prompting HSBC to cite the likelihood of further subprime losses as it said in a note to clients that there was no “compelling case” to buy Mizuho shares at the moment.
Soured subprime bets have cost Japan’s top three banks a total of $4.7 billion so far.
“Though banks may settle down a bit now that this information’s out, the total is more than first thought, keeping people worried,” said Nishimura from Daiwa Securities SMBC.
Industry leader Mitsubishi UFJ Financial Group was down 3.7 percent at 995 yen, while No. 3 Sumitomo Mitsui Financial Group slipped 2.5 percent to 817,000 yen.
The market see-sawed from positive to negative during morning trade, with many shares buoyed by good earnings announced earlier this week.
TDK Corporation rose 9.6 percent to 7,430 yen, JVC surged 11.6 percent to 221 yen, Fujitsu Ltd rose 4.8 percent to 723 yen, and Matsushita rose 4.9 percent to 2,360 yen.
Trade was moderate, with 2.1 billion shares changing hands on the Tokyo exchange’s first section, compared with last week’s daily average of 2.5 billion. Declining stocks beat advancing stocks 961 to 662.
