Nikkei drops on U.S. tech blues, waning BOJ easing hopes
* Nikkei falls to 1 1/2-week low ahead of BOJ policy announcement * Fall in U.S. internet shares hit SoftBank, other tech shares * Brokerages, financial firms underperform as market sees no BOJ stimulus * Exporters another loser as yen rebounds, Honda down 2.7 pct By Hideyuki Sano TOKYO, April 8 (Reuters) - Japanese shares dropped on Tuesday after a sudden tumble in U.S. tech stocks turned investors against risk, and as the Bank of Japan is expected to offer no new stimulus at its policy announcement later in the day. The Nikkei share average fell 1.2 percent to 14,638.09 , its lowest levels in a week and a half, underperforming its U.S. and regional peers. "The impact of a fall in U.S. shares was unavoidable. Many participants are on the sidelines, which makes markets more susceptible to one-direction moves. The market will have to wait for earnings to rebuild," said a trader at a Japanese brokerage firm. U.S. shares fell in the past few sessions, led by tech stocks, as investors bid down expensive internet companies and rotated into defensive names. That hit Japanese tech stocks, with SoftBank seen as particularly vulnerable ahead of the IPO by Alibaba. The Japanese internet firm has around a 37 percent stake in the China-based e-commerce giant. Softbank fell 3 percent to five-week lows while Yahoo Japan , 42.6 percent owned by SoftBank, fell 3.9 percent to five-month lows. Investors expect the BOJ to hold off providing any additional economic support as it concludes its two-day policy meeting on Tuesday. The sectors that are considered to benefit the most from the BOJ's money printing, such as securities brokers and financial companies fell sharply, reversing some of their gains from late last week. Brokerage shares fell 2.7 percent while other financial companies dropped 2.5 percent. Still, many market players expect the BOJ to take some steps later this year, believing the Japanese economy could falter after a last week's sales tax hike, and inflation could fall short of the 2 percent BOJ's target. "We expect net trade to remain sluggish, as imports are more expensive and slower Chinese demand weighs on exports. Household consumption should also suffer from the tax hike. So growth could slow down and if it slows too much, the BOJ is very likely to intervene to compensate for that," said Stephanie de Torquat, strategist at Lombard Odier, a Swiss private bank based in Geneva. Exporters' shares also underperformed after the yen gained in the past few sessions to fetch 102.86 yen to the dollar , stepping back from three-month low of 104.13 hit late last week. Honda Motor fell 2.8 percent while Bridgestone dropped 2.7 percent, in relatively heavy trade volume. The overall trading volume is low, however, just slightly above its levels at the same time the previous day, which saw one of the lowest trading volumes so far this year. The broader Topix index dropped 1.6 percent to 1,177.29 while the new JPX-Nikkei Index 400 fell 1.5 percent to 10,698.48. (Editing by Eric Meijer)
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