November 15, 2016 / 2:52 AM / 2 years ago

Nikkei edges down in choppy trade on profit-taking

* Hokuetsu Kishu tumbles after cutting forecast

* Banks rise after 1H earnings meet expectations

By Ayai Tomisawa

TOKYO, Nov 15 (Reuters) - Japan’s Nikkei share average edged down in choppy trade on Tuesday morning as investors took profits from sharp gains in the past few days that were driven by hopes that Donald Trump’s economic policies would favour Japanese exports by strengthening the dollar.

While encouraged by the dollar’s surge against the yen on the back of soaring U.S. bond yields, some investors have turned cautious because of the abrupt move.

“A weak yen trend is giving the market a relief as it raises hopes that corporate earnings will be better than expected. But the rising U.S. yields will have to come down at some point, so people are cautious against when the turnaround moment will arrive,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

The Nikkei dropped 0.3 percent to 17,625.48 after opening a tad higher.

The benchmark index has risen nearly 9 percent since the U.S. election result last Wednesday as investors in the Japanese market reassessed the economic implications of Trump’s shock victory.

The 10-year U.S. bond yield has jumped about 0.40 percentage point to 10-month highs since Trump was declared the winner last Wednesday. While the dollar is up 6.7 percent from a low on Wednesday. In Asia trading on Tuesday, the dollar soot at 108.10, down 0.5 percent from an overnight level of 108.545 yen.

Exporters were mixed, with Toyota Motor Corp rising 0.4 percent, Honda Motor Co gaining 0.7 percent and Panasonic Corp falling 0.2 percent.

Mitsubishi UFJ Financial Group jumped 4.0 percent after saying that it will buy up to 1.69 percent of own stock for as much as 100 billion yen.

Two other big banks also rose after their mid-year results met market expectations despite being lower on the year. Sumitomo Mitsui Financial Group rose 3.4 percent while Mizuho Financial Group gained 1 percent.

Banks in general were helped by rising U.S. yields, which should favour their investment opportunities.

Paper company Hokuetsu Kishu Paper nosedived 8 percent after the company cut its net profit forecast for the year ending March 2017 to 8 billion yen from a previously forecast 10 billion yen.

The broader Topix was flat at 1,400.58 and the JPX-Nikkei Index 400 edged up 0.1 percent to 12,594.08.

Editing by Simon Cameron-Moore

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