Nikkei snaps 3-day winning streak; yen strength weighs on corporate profits
By Joshua Hunt
TOKYO May 12 (Reuters) - Japanese shares fell for the first time in four days on Thursday as appetite for riskier assets was hurt by a decline on Wall Street and dismal earnings and forecasts from Japan Inc.
The Nikkei share average declined 0.4 percent to 16,510.81 points by late morning, putting the benchmark index on course to end a three-day winning streak.
"The strength of the yen against other G7 currencies continues to be a concern," said Martin King, co-managing director at Tyton Capital Advisors.
The yen edged away from a two-week low against the U.S. dollar on Thursday and failed to test a major psychological level of 110 yen per dollar, hurting sentiment.
Investor sentiment soured further after the Dow Jones industrial average suffered its worst day since February on Wednesday as soft quarterly reports from Walt Disney, Macy's and other major shares undermined confidence across the consumer sector.
Market players said investors were also concerned about a raft of dismal company earnings forecasts that have emerged during a week of quarterly reports following a period of sustained yen strength, which cuts deeply into exporters' profit outlook.
"We're beginning to see that guidance from exporters have been on many occasions quite shocking, forecasting in some cases declines in profit of 20 to 50 percent in the coming year," said Stefan Worrall, director of Japan equity sales at Credit Suisse.
"People are really shocked to see such low forecasts for shares that have seen record or double-digit growth in recent years and at first many felt they were overly conservative. But after the yen strength we've seen recently, some of these forecasts suddenly don't look so conservative after all." Continuación...