(Adds stocks and comments)
By Taiga Uranaka
TOKYO, May 12 (Reuters) - Japan's Nikkei share average dipped
0.2 percent on Monday, down for a third day as exporters such as
Honda Motor <7267.T> were dented by a firmer yen against the
dollar.
Financials also extended losses, with Japan's largest bank
Mitsubishi UFJ Financial Group <8306.T> falling 2.9 percent amid
rekindled concerns about the health of the sector following a
massive loss by American International Group <AIG.N>.
"The market's weak moves could be a signal that the rebound
from March 17 is at its peak," said Kenichi Hirano, operating
officer at Tachibana Securities.
After hitting the recent bottom on March 17, the Nikkei
regained nearly 20 percent by the middle of last week, with bank
shares leading the rebound.
While the index still is 25 percent below last year's high,
many market analysts say Japanese stocks are no longer cheap
given the weak outlook for corporate earnings.
So far, 43 percent of companies listed on the Tokyo stock
exchange's first section have reported earnings and they forecast
a 6 percent decline in recurring profit, or pretax profit, for
the year ending in March 2009, data from the Shinko Research
Institute shows.
"(The market's direction) depends on corporate outlooks. It
changes on how investors see fluctuations in currencies and the
cost of raw materials," said Hiroaki Osakabe, fund manager at
Chibagin Asset Management.
The benchmark Nikkei average <> ended the morning down
23.3 points at 13,632.04. The broader TOPIX index <> shed
0.7 percent to 1,331.89.
The Nikkei found a support at the 25-day moving average,
paring some earlier losses after closing in on that point.
EXPORTERS DOWN
Honda fell 2.2 percent to 3,140 yen and Toyota Motor Corp
<7203.T> shed 2.3 percent to 5,180 yen. The two automakers and
many other exporters based their earnings outlook on an
assumption the dollar would average 100 yen during the current
year ending March 2009.
The dollar slid below 103 yen in the morning before paring
losses to trade around 103.15 yen <JPY=>.
Mitsubishi UFJ fell to 1,056 yen. Japan's largest brokerage
Nomura Holdings Inc <8604.T> lost 2.7 percent to 1,742 yen.
One bright spot was air conditioner maker Daikin Industries
Ltd <6367.T>, which rose 2.4 percent to 5,180 yen. It was boosted
by a report in the Nikkei business daily on Saturday that group
operating profit is expected to rise more than 10 percent to
about 140 billion yen ($1.36 billion) this financial year, helped
by strong sales of energy-efficient commercial units in China and
Europe.
Trade was thin, with some 732 million shares changing hands,
compared with last week's morning average of 933 million.
Decliners outnumbered gainers by just over two to one.
($1=103.00 yen)
(Editing by Brent Kininmont)
