August 15, 2016 / 2:17 AM / 2 years ago

Nikkei dips as yen stays strong, GDP disappoints

* Sharp soars after Foxconn completes takeover

* BOJ buys ETFs on Friday

By Ayai Tomisawa

TOKYO, Aug 15 (Reuters) - Japan’s Nikkei share index slipped on Monday as the yen stayed strong and data showed economic growth stalled in the second quarter, souring investor sentiment.

The Nikkei dropped 0.2 percent to 16,884.76 points by midmorning, after rising 4.1 percent last week.

“The market will likely stay weak throughout the day, though expectations for the BOJ’s ETF buying may limit the downside,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

The Bank of Japan on Friday bought 1.2 billion yen of exchange traded funds focused on companies which support investment in physical and human capital. The central bank bought 70.7 billion yen of ETFs on Wednesday.

“If the market is in negative territory in the morning session, there are hopes that the BOJ will buy ETFs in the afternoon,” Sato said.

The central bank said late last month that it would increase ETF purchases so its total holdings increase at an annual pace of 6 trillion yen, up from its previous pace of 3.3 trillion yen.

Japan’s economy expanded by a scant 0.2 percent on an annualised basis in the April-June quarter, less than a median market forecast for a 0.7 percent increase and a marked slowdown from a revised 2.0 percent increase in January-March, Cabinet Office data showed.

The greenback was little changed at 101.370 yen after losing 0.6 percent on Friday.

Exporters were mixed, with Toyota Motor Corp falling 0.2 percent, Honda Motor Co rising 0.5 percent and Panasonic Corp dropping 0.8 percent.

Sharp Corp soared as much as 17 percent after the company said that Taiwan’s Foxconn had completed its takeover.

The broader Topix dropped 0.1 percent to 1,321.42 and the JPX-Nikkei Index 400 declined 0.2 percent to 11,886.08. (Editing by Kim Coghill)

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