Nikkei tumbles on weak U.S. GDP, earnings disappointment
* Speculators lock in gains after market's rally * Soft U.S. data, fall in European shares trigger selling * Honda, NTT Docomo, Oriental Land hit by earning disappointment By Hideyuki Sano TOKYO, April 30 (Reuters) - Japanese shares tumbled on Thursday as traders locked in profits from recent gains, discouraged by weak U.S. growth figures, a retreat in overseas shares and disappointing earnings from Honda Motor and a few other companies. The Nikkei share average fell 1.9 percent to 19.673.52 points while the broader Topix index shed 1.9 percent to 1,597.04. If those losses are sustained until the close, it would mark the indexes' biggest daily fall since early January. "Hedge funds bought Japanese stock futures in February and March but they are unwinding their positions globally, such as buying in European shares and selling in the euro. Their selling should be considered in this context," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "Their unwinding is unlikely to end in a day or two," he added. Japanese shares have attracted investors so far this year due to a number of factors including monetary stimulus in Japan and Europe as well as hopes for solid growth in Japanese corporate earnings and higher shareholder returns. As a result, the Topix has risen more than 10 percent so far this year, outperforming U.S. markets and posting the second biggest gains in Asia after China. But surprisingly soft U.S. GDP data provided players with reasons to lock in gains for now, given the picture for the Japanese economy rests on the assumption that all is well with the U.S. economy, Japan's biggest export market. "The outlook for the U.S. economy and monetary policy looks uncertain. Even considering that bad weather and port strikes in the West Coast played a role, it is questionable if the U.S. growth is strong enough to allow a rate hike even by the end of year," said Takashi Hiroki, chief strategist at Monex Securities. Indeed, the U.S. Federal Reserve downgraded its view of the U.S. labour market and economy on Wednesday, though it dropped few hints on the timing of the liftoff, or its first rate hike. Earnings from Japanese companies also failed to live up to investors' expectations. Honda Motor fell 6.4 percent after it forecast only a scant 0.4 percent rise in net profit for the current financial year to March. NTT Docomo dropped 6.3 percent as its profit guidance - of 6.4 percent operating profit growth in 2015/16 - failed to excite investors. Some domestic-demand oriented companies, major driver of this year's rally, also saw sharp falls after earnings. Oriental Land, the operator of Tokyo Disney Land, fell 4.4 percent, while Yamazaki Baking fell 10.1 percent. Takeda Pharmaceutical, Japan's biggest drugmaker by market cap, dropped 3.0 percent after it reported its first annual loss in history to take charges for settlement costs of a lawsuit related to its diabetes drugs in the United States. The JPX-Nikkei Index 400 fell 1.9 percent to 14,493.48. (Editing by Kim Coghill)
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