Nikkei falls 1.9 pct, chip-related shares falter

* Talk of possible long liquidation in Nikkei futures

* Chip-related shares and other techs falter

* But Ricoh bucks trend and surges after hiking estimate

* Nikkei’s fall below 25-day MA adds to weakness-fund manager

By Masayuki Kitano

TOKYO, April 22 (BestGrowthStock) – Japan’s Nikkei average fell 1.9
percent on Thursday, with market players saying a weaker futures
market and the break of a closely-watched technical level helped
trigger long liquidation after the previous day’s rally.

Chip shares retreated from higher ground reached the previous
day on Apple’s results but printer and copier maker Ricoh Co Ltd
(7752.T: ) surged after saying its operating profit for the last
financial year would be much bigger than previously forecast.

Despite the Nikkei climbing 1.7 percent on Wednesday for its
biggest one-day percentage gain in more than a month, market
players had been unconvinced that a pullback for the benchmark
that began in early April was over.

A lower finish for Nikkei futures in Chicago (2NKc1: ) compared
to their Osaka close (JNIc1: ), a drop in U.S. stock index futures
(SPc1: ), and the Nikkei’s open below its 25-day moving average
likely provided impetus for short-term speculators to cut some of
their long positions, market players said.

“There was talk of active buying in Nikkei futures the
previous day, and there is the possibility that such positions
are being dumped,” said Nagayuki Yamagishi, investment strategist
at Mitsubishi UFJ Securities.

While concerns over Greece’s fiscal woes continue to simmer,
the fundamental backdrop for Japanese equities has not changed,
he added.

“It is not as if the yen is rising that much, and if you ask
how corporate earnings are doing, they have been on the positive
side,” Yamagishi said.

The benchmark Nikkei (.N225: ) fell 208.39 points to 10,881.66
after opening below its 25-day moving average, now near 11,070.

The 25-day average is a popular technical indicator among
Japanese equities investors, and a clear break below the line is
often regarded as a sign that the market may have more room to
fall.

The Nikkei’s open below that moving average after hovering
near it the previous day likely helped exacerbate the market’s
drop, said Hiroaki Osakabe, a fund manager for Chibagin Asset
Management.

“When that happens, long liquidation can pick up steam,”
Osakabe said.

Support lies near 10,800, roughly the 38.2 percent
retracement of the Nikkei’s two-month rally from its early
February trough to an 18-month peak struck in early April of
11,408.17

The broader Topix index slipped 1.6 percent to 971.33
(.TOPX: ).

Among gainers, Ricoh climbed 3.7 percent to 1,559 yen, the
biggest percentage gainer among Nikkei 225 components, after
lifting its profit estimate 44 percent on cost cuts and
recovering demand. [ID:nTOE63K07A]

Shares in Daiwabo Holdings Co (3107.T: ) jumped 12.5 percent to
225 yen after the company nearly doubled its operating profit
estimate for the year ended March 31 to 4.75 billion yen on
stronger-than-expected PC sales.

Toshiba Corp (6502.T: ), the supplier of NAND-type flash memory
chips for Apple’s iPhone, fell 2.1 percent to 516 yen, giving
back some gains made on Wednesday after Apple’s results beat
expectations.

Investment Advice

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

Nikkei falls 1.9 pct, chip-related shares falter