Nikkei's winning streak runs into profit-taking
* Low trading volume may be a sign for correction - analyst * Tomy falls after Marunouchi Capital sells entire stake * Kyushu Electric rises after nuclear reactor restart announcement By Ayai Tomisawa TOKYO, May 26 (Reuters) - Japan's Nikkei share average edged down on Tuesday morning, snapping a seven-day winning streak as investors took profits after the recent gains made on optimism over the economy's recovery and higher shareholder returns. The Nikkei 225 dropped 0.1 percent to 20,395.69 by mid-morning, flitting between positive and negative territory. If the benchmark index close stronger it would make gains for eight straight days - the longest winning streak since last August. The Nikkei has gained 4.3 percent over the past seven days, supported by the brighter outlook of shareholders, strong corporate earnings, optimism for the recovering economy and expectations that the U.S. Federal Reserve will hold off from raising interest rates soon. But some analysts warned that trading volume has been thin in the past two days, which may have been partly due to fewer market participants over Monday's U.S. holiday but could be a sign for a market correction. Trading volume on the Tokyo Stock Exchange's main board was thin on Monday, with only 2.05 billion shares changing hands, the lowest in a month. Volume stood at 2.075 billion shares on Friday. "If the stock market is rising with high volume, it's a sign that the market will likely rise further, but when the market is marginally higher with low volume, there is a risk behind the rise," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, citing a possibility of unwinding bullish positions. "Whether it's a political risk in the euro zone, volatility in the bond market or the timing of a U.S. rate hike, we can't ignore these risks," he said. Exporters lost ground, with Toyota Motor Corp falling 0.4 percent, Honda Motor Co dropping 0.3 percent and Sony Corp shedding 1.2 percent. Tomy Co tumbled as much as 5.6 percent after it said buyout firm Marunouchi Capital sold its entire stake in the Japanese toymaker to SMBC Nikko Securities. Outperforming the market was Kyushu Electric Power, which rose as much as 4.5 percent after it said it hoped to restart the 890-megawatt No.1 reactor at the Sendai nuclear plant in southwestern Japan in late July. The broader Topix dropped 0.2 percent to 1,656.36 and the JPX-Nikkei Index 400 shed 0.2 percent to 14,976.38. (Editing by Simon Cameron-Moore)
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