Nikkei falls on weak U.S. shares; Abe plan gets muted reaction
* Toraku ratio highest since Abe took office * Shows stock market clearly overbought By Ayai Tomisawa TOKYO, June 25 (Reuters) - Japan's Nikkei share average edged down on Wednesday morning as investors took profits from recent rallies, hit by weakness in Wall Street, while the government's widely-anticipated growth strategy met a muted market reaction. Prime Minister Shinzo Abe unveiled a package of measures on Tuesday aimed at boosting Japan's long-term economic growth, from phased-in corporate tax cuts and reform in the Government Pension Investment Fund to a bigger role for women and foreign workers. The Nikkei dropped 0.5 percent to 15,301.79, still comfortably sitting above its 25-day moving average of 14,970.74. The toraku ratio, or up-down ratio, shows that the market is clearly overheated. The ratio is calculated by dividing the 25-day moving average of stocks on the Tokyo Stock Exchange's first section that gained by the 25-day average of those that fell. A level above 120 signals an overheated market; Tuesday's figure was 164. It was the highest since Dec 19, 2012, when the market was rocketing just after Abe took office pledging to end deflation and generate sustainable growth. "There was no big surprise in yesterday's announcement as it was in line with what's been reported," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management. "That said, the market confirmed that Abe did flesh out details of the corporate tax cut plan and GPIF reforms." He said that profit-taking may continue for a while amid the signs of overheating, but there was no reason to sell aggressively. Index-heavy weight stocks which include SoftBank Corp and Fanuc Ltd both fell 1.0 percent. Exporters were mixed, with Toyota Motor Corp adding 0.2 percent, Honda Motor Co flat, and Panasonic Corp falling 0.2 percent. The dollar traded at 101.94 yen, having drifted on either side of 102.00 for the past two weeks. The broader Topix fell 0.2 percent to 1,266.22 while the new JPX-Nikkei Index 400 declined 0.2 percent to 11,516.66. (Editing by Eric Meijer)
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