Nikkei falls as foreigners sell stocks on North Korea fears

  • Reuters
  • Stock Market News
Nikkei falls as foreigners sell stocks on North Korea fears

* Foreigner selling offsets Bank of Japan's ETF buying - analyst

* Foreigners post 790.9 bln yen of net selling in Japan cash stocks in 5 weeks

* Nikkei Inc to add Recruit, Japan Post, boosting their shares

* CyberAgent dives after disappointment it won't be part of Nikkei

By Ayai Tomisawa

TOKYO, Sept 6 (Reuters) - Japan's Nikkei share average fell to its lowest in more than four months on Wednesday, slipping below a key technical support as risk appetite was sapped by North Korea tensions and the strengthening yen.

The Nikkei .N225 was down 0.3 percent to 19,325.87 by the midday break, after getting as low as 19,254.67 - the lowest level since May 1.

The fall also took the benchmark index below its 200-day moving average, an important technical support.

Investors flocked to the safe-haven yen, pressuring the dollar to fall 0.2 percent to 108.60 yen JPY= in Asian trade.

A top North Korean diplomat warned that his country was ready to send "more gift packages" to the United States as world powers struggled to find an effective response to Pyongyang's latest nuclear weapons test. stocks' valuations are cheap and companies' fundamentals are not bad, but foreign investors see Japanese shares losing attraction because they are susceptible to East Asian risks," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE: MS ) Securities.

"There are expectations that the Bank Of Japan would buy exchange-traded funds when the market falls, but foreigners' selling is so big that it would offset the central bank's market-supporting operation."

The BOJ bought a total of 147.8 billion yen worth of ETFs over the past two days. Meanwhile, foreign investors have been net sellers of Japanese cash stocks for the past five weeks, offloading shares worth a total of 790.9 billion yen, Japan Exchange data showed.

Exporters were sold, with Toyota Motor Corp 7203.T falling 0.8 percent and Nissan Motor Co 7201.T dropping 1.1 percent, while Nintendo Co 7974.T shed tumbled 1.5 percent and Advantest Corp 6857.T declined 1.3 percent.

Elsewhere, Japan Post Holdings 6178.T and Recruit Holdings 6098.T jumped 6.2 percent and 7.8 percent, respectively, after Nikkei Inc said it will include the stocks in the Nikkei 225 as of Oct. 2. the other hand, the index provider said it will remove Hokuetsu Kishu Paper Co 3865.T and Meidensha Corp 6508.T from the index, sending their share prices down by 10 percent and 8.4 percent respectively.

CyberAgent 4751.T dived 7.1 percent as investors had expected that the stock would be added to the index after some brokerages hinted in their reports that CyberAgent would be included.

Separately, the labor ministry said Japanese workers' wages fell in July from a year earlier due to a drop in summer bonus payments, casting doubts over the sustainability of a recent improvement in consumer spending.

The data had little impact on the market, traders said. broader Topix .TOPX dropped 0.2 percent to 1,587.51.

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