January 28, 2019 / 6:31 AM / 24 days ago

Nikkei weakens on firm yen, investors cautious before earnings reports

* Companies releasing earnings this week include chip-related shares

* Market does not want to see strong yen before earnings - analyst

* Suzuki Motor tumbles after Maruti Suzuki posts dismal results

By Ayai Tomisawa

TOKYO, Jan 28 (Reuters) - Japan’s Nikkei fell on Monday as a stronger yen hurt sentiment and weighed on the broader market, though declines were limited by investors’ reluctance to take big positions ahead of third-quarter corporate earnings reports this week.

Nissan Motor Co ended 0.8 percent lower after falling to an intraday low in early afternoon trade after Bloomberg reported that the automaker is facing an investigation by the Securities and Exchange Commission (SEC) over whether it accurately disclosed payments to executives in the United States, citing sources.

The Nikkei share average dropped 0.6 percent to 20,649.00 points. The broader Topix shed 0.7 percent to 1,555.51, with 32 of Topix’s 33 subsectors in the red.

On Friday, Wall Street was buoyed after a deal was announced to reopen the U.S. government following a prolonged shutdown, but the Japanese market shrugged off the news.

“Investors have been nervous to see major manufacturers’ earnings, and thin trade has reflected their reluctance to take positions aggressively,” said Hiroyuki Fukunaga, chief executive of Investrust.

Four of the five trading days of last week saw less than two trillion yen in turnover on the Tokyo Stock Exchange’s main board.

Also souring the mood, the yen advanced 0.2 percent to 109.33 against the dollar.

“The market does not want to see the strong yen especially when currency-sensitive manufacturers release their results,” Fukunaga said, adding that the Nikkei’s downside is expected around 20,000 depending on the results.

On Monday, the main board saw only 1.87 trillion yen in turnover as well.

Analysts said that the market has been wary since precision motor maker Nidec Corp and automation equipment maker Yaskawa Electric Corp both lowered their annual operating profit outlooks earlier this month as the Sino-U.S. trade dispute dampened Chinese manufacturers’ investment appetite.

Companies releasing earnings this week include silicon products maker Shin-Etsu Chemical, chip equipment makers Advantest Corp and Tokyo Electron.

Large cap stocks such as SoftBank Group Corp fell 1.2 percent, while TDK Corp dropped 1.5 percent. Nintendo Co shed 2.9 percent.

Suzuki Motor dropped 3.3 percent after Maruti Suzuki India Ltd, majority owned by Suzuki, posted a lower-than-expected profit for the third quarter.

Declining issues outweighed advancing ones 1,498 to 560. (Editing by Simon Cameron-Moore)

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