Nikkei edges down hurt by economy worries

* Japan PM, BOJ gov talked on phone on forex-Sengoku

* Need to study details but reaction looks muted -analyst

* Closing of funds on econ worries hurting stocks -analyst

By Aiko Hayashi

TOKYO, Aug 23 (BestGrowthStock) – Japan’s Nikkei fell 0.4 percent on
Monday, dented by what some market players said was selling by
hedge funds and foreign investors amid worries that a strong yen
would derail a fragile economic recovery and lingering fears
about global economic growth.

After the market closed for the midday break, Chief Cabinet
Secretary Yoshito Sengoku said Japanese Prime Minister Naoto Kan
and Bank of Japan Governor Masaaki Shirakawa talked over the
phone on Monday about currency and the economy and agreed to work
closely. [ID:nTKG006835]

Markets had been rife with speculation that the BOJ may try
to pre-empt government pressure for action and further loosen its
already ultra-easy policy at an emergency meeting before or
shortly after an expected meeting between Shirakawa and Kan.

“Investors will need to further study the content of the
phone meeting, but at the moment reaction in markets look pretty
muted. In the end, the impact from domestic factors has become
limited on stock moves these days,” said Hajime Nakajima, deputy
general manager at Cosmo Securities.

“Rather, a growing trend seems to be that signs of weak
economic recovery in the world are prompting some funds to close
down and the cash-out moves as the result of that are weighing on
stocks. That money is likely flowing into U.S. bonds and JGBs.”

The benchmark Nikkei (.N225: ) slipped 38.37 points to
9,141.01. It fell 2 percent on Friday and was down 0.8 percent on
the week, for a second straight negative week.

The broader Topix (.TOPX: ) fell 0.4 percent on Monday to
826.30.

U.S. stocks (Read more about the stock market today. ) inched down on Friday on persistent concerns that
the recovery has tapered off. [.N]

Canon Inc (7751.T: ) slipped 2.1 percent to 3,525 yen and Tokyo
Electron Ltd (8035.T: ) shed 1.8 percent to 4,290 yen. Honda Motor
Co (7267.T: ) fell 1.4 percent to 2,780 yen.
(Editing by Joseph Radford)

Nikkei edges down hurt by economy worries