(Adds stocks, details)
By Aiko Hayashi
TOKYO, Jan 28 (Reuters) - Japanese stocks fell more than 2
percent on Monday, with exporters such as Canon Inc <7751.T>
down after U.S. stocks sagged late last week, while investors
grew cautious ahead of events including a Federal Reserve
meeting that is expected to result in another interest rate cut.
One stock bucking the bearish market trend was KDDI Corp
<9433.T>. Japan's No. 2 phone company rose after it posted a 40
percent rise in quarterly operating profit thanks to its
wireless business and lifted its annual outlook above analysts'
expectations. []
Monday's fall in Japan followed last week's rollercoaster
ride in which global equity markets were sent down by growing
despair over the U.S. economy early in the week and then lifted
up by a $150 billion stimulus plan agreed by U.S. legislators
and the White House. []
"The market appears to have hit bottom last week but it's
still not in a position to keep rising, considering various
events pending such as the Fed rate decision," said Koichi
Ogawa, chief portfolio manager at Daiwa SB Investments.
"The big earthquake is over, but we still expect
aftershocks."
The benchmark Nikkei average <> ended the morning
session down 2.6 percent or 354.23 points at 13,274.93, after
shedding 1.7 percent last week.
The Nikkei is down 13.3 percent so far this year and 27.5
percent since last year's highest point hit in February.
The broader TOPIX index <> shed 2.7 percent or 36.41
points to 1,308.36.
On Friday, the Dow Jones industrial average <> slid 1.4
percent.
Ogawa said investors were likely to focus more on overseas
factors than the domestic corporate earnings season, which heats
up this week. Nippon Steel Corp <5401.T> is among Japanese
companies set to announce results later in the day.
The U.S. Fed's meeting is expected to result in a reduction
of up to 50 basis points in the fed funds rate, now down to 3.5
percent after an emergency slash last week. The announcement is
due on Wednesday.
On Monday, President George W. Bush will elaborate on his
views of the U.S. economy in his annual State of the Union
address.
EXPORTERS HIT
Shares of Japanese exporters fell out of favour after a
sharp rebound in recent sessions.
Canon dropped 3.9 percent to 4,670 yen and Sony Corp
<6758.T> shed 3.1 percent to 4,950 yen, while automakers Honda
Motor Co Ltd <7267.T> declined 3.1 percent to 3,170 yen and
Toyota Motor <7203.T> lost 3.1 percent to 5,400 yen.
Shares of Hitachi Construction Machinery Co Ltd <6305.T>
tumbled 12.3 percent to 2,665 yen after Nomura Securities cut
its rating on the construction equipment maker to "3" from "2,"
citing rising costs and potential sales losses due to parts
shortages in Europe.
Among stocks that gained, KDDI added 1.4 percent to 728,000
yen, becoming the biggest positive contributor to the Nikkei
225.
Online broker Matsui Securities Co Ltd <8628.T> rose 0.8
percent to 750 yen after it reported on Friday a 12 percent
year-on-year rise in group net profit for the April-December
period to 10.6 billion yen ($99.3 million).
Trade was light on the Tokyo exchange's first section, with
838.7 million shares changing hands, compared with last week's
morning average of 1.1 billion.
Decliners outnumbered advancers by a ratio of nearly 3 to 1.
(Reporting by Aiko Hayashi; Editing by Hugh Lawson)
