Nikkei falls to 3-week low as oil price fears offset strong machinery orders
* Market nervous before ettlement in futures contracts on Friday - traders
* Futures trade may sway cash market until Friday - traders
By Ayai Tomisawa
TOKYO, Dec 9 (Reuters) - Japan's Nikkei share average fell to its lowest in more than three weeks on Wednesday morning after U.S. stocks dropped on concerns over sliding oil prices, offsetting Japan's better-than-expected machinery orders data.
The Nikkei dropped 1.1 percent to 19,278.20 after hitting as low as 19,261.16 earlier, the lowest since November 16.
Although crude prices edged up during Asian trade after dipping below $37 per barrel overnight, global investors remain risk-averse, traders said.
They also said that lower oil prices could serve as a tailwind to Japan for lower energy prices, but the Japanese market could suffer a ripple effect as long as investors avoid risky assets.
Traders also noted that the market may see volatility ahead of Friday's settlement in Nikkei futures and option contracts.
"Those who had bought Nikkei futures on expectations that the index will rise on ECB's easing are looking for the right timing to sell," said Michiro Naito, executive director of equity derivatives and quantitative strategies at JPMorgan, referring to last week's event when the European Central Bank dashed expectations for a major burst of stimulus. Continuación...