Nikkei drops as strong U.S. jobs report stokes concerns about Fed rate hike

domingo 8 de marzo de 2015 22:05 GYT

* Further slide in U.S. stocks negative, but strong
dollar/yen may support Japan stocks - analyst
    * Japan's weak GDP hurts sentiment
    * Japan Display soars after confirming plant investment

    By Ayai Tomisawa
    TOKYO, March 9 (Reuters) - Japan's Nikkei share average fell
on Monday after a strong U.S. jobs report stoked concerns that
the Federal Reserve could raise interest rates sooner than
expected, while weaker-than-expected domestic growth data also
hurt sentiment.
    The Nikkei dropped 0.9 percent to 18,797.77 points
by midmorning, moving away from a 15-year high of 18,979.64 hit
last Friday.
    U.S. nonfarm payrolls increased 295,000 last month after
rising 239,000 in January, and the unemployment rate dropped
two-tenths of a percentage point to 5.5 percent, the lowest
since May 2008, slipping into territory that some Fed officials
consider consistent with full employment. 
    "There are concerns that U.S. stocks may fall further on
concerns about the timing of a rate hike, and Japanese stocks
may follow suit," said Kazuhiro Miyake, a chief strategist at
Daiwa Securities. "But unless investors become risk averse and
buy the yen, losses may be limited in the Japanese market."
    The dollar traded at 120.70, not far from Friday's
three-month high of 121.29. It was back near a 7-1/2 year peak
of 121.86 set in December.
    Data showed Japan's economy grew less than initially
reported in the fourth quarter as capital expenditure declined,
in a worrying sign that a rebound in consumer spending is not
encouraging business investment. 
    Index-heavy stocks languished, with Fast Retailing 
dropping 1.1 percent and SoftBank Corp shedding 1.3
percent, with both companies contributing a hefty negative 28
points to the Nikkei benchmark.
    Exporters were mixed, with Toyota Motor Corp 
falling 0.2 percent and Fuji Heavy Industries rising
0.4 percent.
    Bucking the weakness, Japan Display Inc jumped as
high as 5.3 pct to a 1-1/2-week high of 501 yen after it
confirmed that it would build a new $1.4 bln liquid crystal
display (LCD) manufacturing plant. 
    The broader Topix dropped 0.6 percent to 1,531.92
and the JPX-Nikkei Index 400 shed 0.6 percent to

 (Editing by Kim Coghill)