Nikkei dips on profit-taking; Kadokawa, Dwango soar on merger report
* Nikon hits lowest since March 2011 on profit decline f'cast * Sony, megabanks' earnings eyed on Wednesday By Ayai Tomisawa TOKYO, May 14 (Reuters) - Japan's Nikkei average edged down on Wednesday, slipping from a 1-1/2-week high on profit-taking after big gains the previous day, while Kadokawa Corp and Dwango Co soared on a media report that the two firms plan to merge. Publishing house Kadokawa and online video distributor Dwango both jumped 14 percent after the Nikkei newspaper reported they would merge operations under a holding company to be set up as early as next spring. Dwango was the eighth most traded stock by turnover. The Nikkei said Kadokawa aims to take advantage of Dwango's online service and related expertise to bring its own movies, games and other content directly to consumers, including those outside Japan. The benchmark Nikkei was down 0.2 percent at 14,392.20 in midmorning trade after rising 2.0 percent to 14,425.44 on Tuesday, its highest close since May 2. Index heavyweights SoftBank Corp and KDDI Corp , which gained sharply on Tuesday, languished on profit-taking, falling 1.0 percent and 3.9 percent, respectively. Market observers said resistance for the Nikkei would likely stay at 14,500 for the time being. "We still have major earnings to be reported. The market lacks positive catalysts for investors to chase shares higher," said Hikaru Sato, a senior technical analyst at Daiwa Securities. Companies reporting earnings on Wednesday include Sony Corp and major banks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group. Nikon Corp dropped 6.7 percent to 1,524 yen, its lowest since March 2011, after forecasting a decline in net profit for the year through March 2015, hurt by its poorly performing digital camera business. Exporters gained marginally, with Toyota Motor Corp rising 0.3 percent, Honda Motor Co adding 0.6 percent and Canon Inc advancing 0.2 percent. The broader Topix was flat at 1,178.87. The new JPX-Nikkei Index 400 was also flat, at 10,731.76. (Editing by Chris Gallagher)
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