(Adds stocks and comments)
By Taiga Uranaka
TOKYO, June 23 (Reuters) - Japan's Nikkei average fell 1.2
percent on Monday, extending losses into a third day to a nearly
one-month low, led down by blue-chip exporters like Toyota Motor
Corp <7203.T> after sharp losses on Wall Street on rising oil
prices.
Financial shares such as Mitsubishi UFJ Financial Group
<8306.T> were under selling pressure after warnings of more
mortgage-related write-downs at U.S. banks.
"There are worries about additional mortgage-related losses
at U.S. financial institutions," said Kenichi Hirano, operating
officer at Tachibana Securities.
"Compared with U.S. and European markets, the Tokyo market
is not cheap anymore in terms of valuations. So, when Wall
Street falls, it puts downward pressure on Tokyo," he said.
The Dow industrial average <> on Friday closed at its
second-lowest level this year and below 12,000 for the first
time since March 17.
Two Wall Street investment banks cut their earnings
estimates for top U.S. home finance companies Fannie Mae <FNM.N>
and Freddie Mac <FRE.N>, citing persistent erosion in U.S.
housing and mortgage credit.
"Many investors are holding off until they see what the Fed
has to say after the FOMC," said Masayuki Otani, chief market
analyst at Maruwa Securities.
The Federal Reserve meets this week and is widely expected
to leave the fed funds rate target at 2 percent, after having
slashed it by 3.25 percentage points since September.
The statement accompanying the rate decision will be closely
watched for clues on the future course of monetary policy.
Toyota fell 2.4 percent to 5,280 yen and Mitsubishi UFJ,
Japan's biggest bank, fell 1.6 percent to 989 yen.
SOLAR POWER
Solar cell-related shares bucked the market downdraft,
helped by media reports of possible government incentives to
spur solar power generation.
Solar-cell production equipment makers Ulvac Inc <6728.T>
jumped 7.8 percent to 4,430 yen and NPC Inc <6255.T> gained 4.1
percent to 6,360 yen.
Maruwa's Otani said production equipment makers are better
positioned than solar-cell manufacturers like Kyocera Corp
<6971.T>, as the former also supply Chinese solar-cell makers.
"Chinese makers are very active in capital investment to
expand production," he said.
Kyocera fell 0.4 percent to 10,450 yen. Sharp Corp <6753.T>,
another major solar panel player, rose 1.4 percent to 1,741 yen.
The Japanese government will come up with measures on
Tuesday to promote household use of solar power generation
systems by introducing subsidies and tax breaks from next year,
the Nikkei financial daily reported on Sunday. []
Precision equipment maker Olympus Corp <7733.T> climbed 1.7
percent to 3,570 yen after Credit Suisse raised its rating on
the firm to "outperform" from "neutral", citing an improvement
in foreign exchange rates from a previous forecast in which the
dollar was assumed at 100 yen compared with 105 yen at present.
Trade was light, with some 835 million shares exchanging
hands compared with last week's morning average of 919 million.
Decliners outnumbered advancers by more than 3 to 1.
(Editing by Chris Gallagher)
