Nikkei falls to 1-month low, hit by worldwide drop in bond prices
* Nikkei downside seen below 18,500, analysts * Renesas soars on report of first-ever net profit By Ayai Tomisawa TOKYO, May 7 (Reuters) - Japan's Nikkei share average fell to a one-month low on Thursday as a worldwide drop in government bond prices spread unease to Japanese stocks during this week's national holidays, compounded by a sell-off on Wall Street. The Nikkei 225 dropped 1.3 percent to 19,288.15 in mid-morning trade after falling to as low as 19,271.46, the lowest level since April 6. Markets were closed in Japan from Monday to Wednesday for the Golden Week holidays. In the U.S., stocks fell on Wednesday after U.S. Federal Reserve Chair Janet Yellen warned of high valuations, adding to anxiety about future interest rates and a global bond rout. "Hedge funds are unwinding their positions and selling Japanese shares which outperformed most of the global markets," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, adding that the Nikkei may fall below 18,500 in a month or so depending on foreign investors' positions. Weak U.S. indicators also added to uncertainty over when the first rate hike by the Fed could take place. Figures published on Wednesday showed tepid private job gains and a second straight quarterly decline in productivity. Exporters were weaker, with Toyota Motor Corp and Honda Motor Co both dropping 1.0 percent and Sony Corp declining 2.4 percent. Benesse Holdings Inc tumbled 19 pct to 3,010 yen, the lowest since Nov 2004 after it reported a net loss of 10.7 billion yen for the year ended March, hit by a special loss related to the aftermath of a big data theft by a former employee. Bucking the weakness, Renesas Electronics Corp soared as much as 6.6 percent after the Nikkei business daily reported that it is expected to report a net profit of more than 80 billion yen for the year ended March 31, the first profit since its inception five years ago. The broader Topix dropped 0.6 percent to 1,676.31 and the JPX-Nikkei Index 400 shed 0.6 percent to 14,279.13. (Editing by Eric Meijer)
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