* Nikkei near 8,000 after rallying nearly 1,000 points in wk
* Banks rise after Fed decides to buy long-term Treasuries
* Exporters sag on a stronger yen
* Investors lock in profits ahead of a 3-day weekend
By Rika Otsuka
TOKYO, March 19 (Reuters) - Japan's Nikkei average slipped
0.6 percent on Thursday, giving up early gains as a stronger yen
hit Honda Motor Co <7267.T> and other exporters, while investors
locked in profits from a sharp rally in the past week.
Tokyo stocks started Thursday firmly, following the lead of
U.S. stocks after the U.S. Federal Reserve decided to buy
long-dated government bonds, with financials such as Mizuho
Financial Group <8411.T> rising. []
But the Nikkei drifted to the negative territory as investors
booked profits ahead of a three-day weekend in Japan, starting on
Friday.
"Investors are a bit worried that Wall Street might be due
for a correction after a rally sparked by the Fed," said Kazuki
Miyazawa, market analyst at Daiwa Securities SMBC.
"The Japanese stock market is also vulnerable to
profit-taking as it had risen more than the U.S. market
recently."
The benchmark Nikkei <> fell 49.28 points to 7,922.89
after briefly rising above 8,000 this week.
The Nikkei posted a five-week closing high of 7,972.17 the
previous day, having recovered almost 11 percent from a 26-year
closing low near 7,000 last week. The broader Topix <> fell
0.1 percent to 763.77.
The dollar fell 0.2 percent against the yen to 95.98 yen
<JPY=>, extending the previous day's slide after the Fed
engineered a sharp fall in U.S. bond yields with its vastly
expanded plans to buy assets. [] [] <FXNEWS>
A stronger yen prompted investors to dump exporters as it
deflates Japanese firms' overseas profits when repatriated.
But market participants were not worried about the downside
risk despite the fact that the Nikkei failed to hold gains that
briefly took it above 8,000.
"U.S. authorities are quick to tackle problems, showing their
commitment to helping markets and the financial sector recover
fast," said Terushi Hirotama, head of trading at Ichiyoshi
Securities. "That is providing investors some sense of security."
CENTRAL BANKS FIGHT CREDIT CRUNCH
The Bank of Japan is also boosting its buying of government
bonds, in its latest move to ease credit crisis, and this
benefited bank shares. []
Japan's top lender Mitsubishi UFJ Financial Group <8306.T>
rose 2.1 percent to 488 yen, while No.2 Mizuho Financial Group
gained 1.9 percent to 210 yen. Sumitomo Mitsui Financial Group
<8316.T>, the third-ranked bank, climbed 2.7 percent to 3,450
yen.
Honda Motor fell 3.5 percent to 2,220 yen on the rise in the
yen, and as Moody's Investors Service downgraded to A1 from Aa3
its long-term credit rating. []
Panasonic Corp <6752.T>, the world's No.1 plasma TV maker and
a big exporter, slid 2.7 percent to 1,111 yen, while Japanese
electronics conglomerate Fujitsu Ltd <6702.T> dropped 6.5 percent
to 348 yen.
Advantest <6857.T>, the world's biggest supplier of machines
that test semiconductors, fell 3.4 percent to 1,432 yen after the
book-to-bill ratio of Japanese chip-making equipment fell to a
record low of 0.35 in February. []
But Toshiba <6502.T> shares gained 0.8 percent to 260 yen
after the company said it has tapped Norio Sasaki as its new
chief executive, entrusting the experienced head of its power
division with a $3 billion cost-cutting plan as the electronics
giant heads for a record loss. []
Trade was light on the Tokyo exchange's first section, with
876 million shares changing hands, compared with last week's
morning average of 1 billion.
Advancing stocks outnumbered declining ones, 804 to 735.
(Editing by Rodney Joyce)
