Japanese Shares Fall as Yaskawa Leads Tech SellOff


TOKYO, April 12 Reuters Japanese shares ended lower on Monday, dragged down by sharp losses in Yaskawa Electric after the industry bellwethers earnings outlook failed to meet the markets expectations, prompting a selloff in other tech stocks.

Nikkei average fell 0.77 to close at 29,538.73. It has been in a holding pattern after hitting a 30andahalfyear high in midFebruary, with a break of either its March 18 high of 30,485 or March 24 low of 28,379, seen as needed for a new trend to emerge.

The broader Topix ended 0.25 lower at 1,954.59.

Shares of robot maker Yaskawa Electric, a leading indicator on Japanese manufacturers earnings trends, lost 7.11 after its February quarter earnings fell short of investor expectations.

The company expects 54.5 jump in its operating profit to 42 billion yen 383.67 million in the current financial year, nearly meeting analysts forecast of 43 billion yen.

Other technology firms also fell, with Nitto Denko, ShinEtsu Chemical and Fanuc dropping between 3.7 and 1.76.

Todays investor reaction to Yaskawa stock suggested that the market expectations for the company was very strong, said Takatoshi Itoshima, strategist at Pictet Asset Management.

Investors sold other tech shares because Yaskawas result implicated disappointing earnings for others. But if they could confirm strong earnings of other firms, they would buy them back.

Supermarket operator Aeon also lost 4.08, after subdued quarterly earnings.

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