Nikkei falls on bond market rout, Konica Minolta jumps
* Bond yield rise threat to stock valuation * Railway companies, real estate firms among underperformers * Konica Minolta jumps on higher shareholder returns By Hideyuki Sano TOKYO, May 14 (Reuters) - Japan's Nikkei share average dropped on Thursday as another rise in bond yields around the world kept many investors on edge, but Konica Minolta jumped after it joined a growing list of companies announcing higher payouts for shareholders. The Nikkei share average dropped 0.7 percent to 19,627.51, snapping four-day winning streak. It was still up 1.3 percent on the week. U.S. debt yields rose sharply on Wednesday despite soft U.S. economic data, worrying investors as higher bond yields tend to dent the attraction of stock investments relative to bonds. "I think the market is starting to price in an end of super-easy monetary policy around the world," said Takashi Hiroki, chief strategist at Monex Securities. Rise in bond yields would be among biggest concerns for the market, Hiroki said, noting that U.S. Federal Reserve Chair Janet Yellen and billionaire investor Warren Buffett have both warned that stock valuations would be expensive if interest rates rise. Many investors think the market will be capped as long as bond yields remain volatile. Japanese bond yields also rose on Thursday in tandem with those on U.S. and European bonds. The 10-year Japanese Government Bond yield rose to 0.470 percent on Thursday, matching two-month high hit earlier this week. Sectors that are deemed vulnerable to higher interest rates came under pressure the most. Railway company shares fell sharply, making the land transport company sub-index the worst performer among the Tokyo Stock Exchange's 33 industry subindexes with its fall of 2.0 percent. Central Japan Railway fell 2.6 percent and Odakyu Electric Railway dropped 3.0 percent. Real estate companies were another big drag, falling 1.3 percent. Mitsubishi Estate fell 1.7 percent. The broader Topix fell 0.6 percent to 1,594.84 and the JPX-Nikkei Index 400 dropped 0.6 percent to 14,413.47. On the other hand, many manufacturers and exporters shares gained as investors looked to improvements in their earnings. Nissan Motor rose 2.1 percent following upbeat earnings while Hitachi gained 0.8 percent. Companies that boosted shareholder returns are being followed closely, with Konica Minolta rising 12.8 percent after it announced a share buyback and dividend hike on top of solid earnings. Toshiba shares rose 2.6 percent after the company said the mark-down in its profits due to accounting irregularities is estimated at a total of around 50 billion yen ($420 million) over the past three years. That announcement soothed fears the investigation could lead to a major scandal. (Editing by Eric Meijer)
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