*Nikkei dips 0.3 percent to a one-month low
*U.S. financial worries hit banks
*Firmer yen hurts exporters, global economic worries weigh
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Aug 20 (Reuters) - Japan's Nikkei average fell 0.3
percent to a one-month low on Wednesday, with bank shares such as
Mitsubishi UFJ Financial Group <8306.T> hit by worries about the
U.S. financial system.
Canon Inc <7751.T> and other blue-chip company stocks
continued to be hurt by recent gains in the yen, which has
exacerbated apprehension about their earnings outlooks.
Following a contraction in second-quarter gross domestic
product, the Bank of Japan cut its assessment to describe the
Japanese economy as "sluggish" - a term it hasn't used since the
1997/98 Asian financial crisis. []
"U.S. financial worries are responsible for about 80 percent
of the market fall here today," said Masayoshi Okamoto, head of
dealing at Jujiya Securities.
"The rest is due to the eroding outlook for corporate
earnings for the first half. The Bank of Japan used the word
'sluggish' for the first time in 10 years yesterday, prompting
concerns that an economic recovery will be delayed."
The benchmark Nikkei <> shed 36.51 points to 12,828.54
by the end of the morning trade, hitting its lowest level since
mid-July.
The broader Topix <> slipped 0.5 percent to 1,229.23.
"Fears of stagflation -- rising inflation amid a global
recession -- are emerging again now that oil prices are getting
higher," said Tsuyoshi Segawa, equity strategist at Shinko
Securities.
The dollar was little changed against the yen at 109.76 yen
<JPY=>, having fallen back from a seven-month high of 110.67 yen
hit last week. A stronger yen curbs exporters' profits when they
are brought back home.
Oil prices <CLc1> rose about 1.5 percent on Tuesday as part
of a broad commodities rebound triggered by weakness in the U.S.
dollar.
U.S. stocks fell for a second straight session on Tuesday on
fears that U.S. home finance firms Fannie Mae <FNM.N> and Freddie
Mac <FRE.N> may need a government bailout.
Lehman Brothers <LEH.N> shares also had another dismal day
after JPMorgan Securities forecast that the investment bank will
take a further $4 billion in write-downs tied to losses on
mortgage-related investments. []
FINANCIALS HIT AGAIN
Top lender Mitsubishi UFJ declined 2.1 percent to 812 yen,
while No.2 Mizuho Financial Group <8411.T> fell 1.5 percent to
460,000 yen and Sumitomo Mitsui Financial Group <8316.T>, the
third-biggest bank, shed 2.2 percent to 667,000 yen.
Nomura Holdings <8604.T>, Japan's biggest brokerage, slipped
1.2 percent to 1,465 yen.
Canon fell 2.1 percent to 5,030 yen, the top drag on the
Nikkei 225, while Toyota Motor Corp <7203.T> lost 2.2 percent to
4,810 yen.
Mitsui O.S.K. Lines <9104.T> and other shippers also weighed
on the market after a key global sea freight index fell for the
first time in five days.
Mitsui skidded 3.7 percent to 1,246 yen, while Nippon Yusen
KK <9101.T> shed 3 percent to 850 yen. Kawasaki Kisen Kaisha
<9107.T> slid 2.7 percent to 765 yen, following a 1.04 percent
decrease in the Baltic Exchange's chief sea freight index <.BADI>
on Tuesday.
Trade was light on the Tokyo exchange's first section, with
773 million shares changing hands, below last week's morning
average of 910 million.
Declining stocks outpaced advancing ones by 913 to 626.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
