Nikkei edges lower after rally; Fujitsu drags

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average fell 0.2 percent on Tuesday on profit-taking after the market hit a six-week high the day before, while shares of Fujitsu (6702.T: ) extended losses on a dispute with its former president.

But makers of 3D TVs, Panasonic Corp (6752.T: ) and Sony Corp (6758.T: ), gained after outlining their sales plans for what they hope will become the next hot product in the electronics industry.

“Given a lack of reasons to really push the Nikkei higher and the fact that it rose over 200 points yesterday, this is a good level for a bit of profit-taking,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.

“We may be close to a short-term peak right now.”

In light trade, the benchmark Nikkei (.N225: ) shed 18.27 points to 10,567.65, after hitting its highest close since January 22 on Monday. It gained more than 4 percent in the previous two trading days.

The broader Topix (.TOPX: ) fell 0.3 percent to 924.38.

Market players said technical indicators show the Nikkei is getting closer to levels where it may be considered overbought, with the benchmark’s relative strength index (RSI) at around 60. Anything above 70 is considered overbought.

Some analysts said foreign investors appeared to be buying shares, while Japanese investors were selling.

FUJITSU DRAGS

Fujitsu sank 3.9 percent to 546 yen to become the biggest decliner among the Nikkei 225 issues on investor worries that a dispute with a former president over his abrupt resignation last year could hamper restructuring efforts.

Fujitsu stock shed 2.7 percent the previous day.

“Investors want to see how Fujitsu’s problems will play out, and some investors may be going for NEC instead,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

Volume in Fujitsu jumped to 56 million shares, the largest daily tally in nearly 22 months, while NEC (6701.T: ) added 0.8 percent to 247 yen in its most active trade since December 2009.

Shares of auto parts maker Jtekt (6473.T: ) dropped 3 percent to 935 yen after Credit Suisse cut its rating to “neutral” and lowered its target price, citing flat growth prospects in sales to recall-hit Toyota Motor Corp (7203.T: ) in the year to March 2011.

The dollar edged down 0.3 percent against the yen to 90.01 yen, and market players said currency levels had become a main focus amid a dearth of other strong factors.

Investors fret about a stronger yen since it eats into exporters’ profits when repatriated.

Exporters were mixed, with Advantest Corp (6857.T: ) down 1.3 percent at 2,147 yen and Canon Inc (7751.T: ) slipping 0.4 percent to 3,965 yen.

But Panasonic Corp (6752.T: ) rose 2.1 percent to 1,334 yen after saying it will launch its 3D TVs in the United States on Wednesday, and cooperate with top U.S. electronics retailer Best Buy Co (BBY.N: ) in promoting the products.

Sony Corp (6758.T: ) gained 1.1 percent to 3,330 yen, after saying it will launch 3D televisions in June and that it hopes 3D models will make up 10 percent of the LCD TVs it aims to sell in the next financial year.

Some 1.6 billion shares traded on the Tokyo exchange’s first section, below last month’s daily average of 2 billion shares and well below last year’s daily average of 2.3 billion.

Declining stocks outnumbered advancing ones, 920 to 589.

Stock Report

(Additional reporting by Elaine Lies; Editing by Edwina Gibbs)

Nikkei edges lower after rally; Fujitsu drags