Nikkei hits 3-week closing low below 10000, JAL up
* Weak U.S. data hits economy view, sparks profit-taking
* Hedge funds' unwinding of risk assets weighs - analysts
* JAL climbs on hopes of bailout announcement on Thursday
* Banks gain as investors buy domestic demand sectors
By Elaine LiesTOKYO, Oct 29 (Reuters) - Japan's Nikkei average slid below10,000 to a three-week closing low on Thursday as a strong yenhurt exporter shares and weak U.S. data renewed worry aboutglobal economic growth, sparking a broad sell-off on Wall Street. Japan Airlines (9205.T) rose nearly 3 percent on news thatthe transport minister will brief about plans to revive JapanAirlines Corp (9205.T) after the close on Thursday, withinvestors keen to see if the government will announce the use ofpublic funds to bail out the struggling carrier. [ID:nT349661]
Analysts said that the unexpected fall in U.S. sales ofnewly-built single family homes in September, which followed afall in consumer confidence data, raised worry about thirdquarter gross domestic product (GDP) data, due out on Thursday.
"If GDP is lower than the market expects, this willinevitably raise worries about the outlook for the next quarterand whether the pace of recovery will slow still further," saidMasayoshi Okamoto, head of dealing at Jujiya Securities.
But other market players warned about making too much of thedata, noting it was equally likely that investors such as hedgefunds were simply using it as an excuse to take profits afterrecent gains and ahead of their business year-end in November.
"There are a lot of hedge funds facing their earnings season,many of whom are looking to sell while asset prices are stillrelatively high," said Nagayuki Yamagishi, a strategist atMitsubishi UFJ Securities.
"The slide is likely to come to an end relatively soon andthis will be a temporary weakness. But given that October andNovember usually see a lot of selling, it's hard to say forsure."
In active trade, the benchmark Nikkei .N225 lost 1.8percent or 183.95 points to 9,891.10, its lowest close since Oct8, while the broader Topix fell 0.7 percent to 882.26.
The S&P 500 Index .SPX slid 2 percent for its fourthstraight day of losses. Sales of newly built single-family homesunexpectedly fell 3.6 percent last month, according to a CommerceDepartment report. Separately, data from the Mortgage BankersAssociation showed demand for mortgages has fallen for the pastthree weeks. [ID:nN28304343]
EYES ON JAL, EARNINGS
With Japan's earnings season in full gear, companies postingweaker-than-expected results were hit.
Hino Motors (7205.T) sank 8.7 percent to 337 yen after thetruck and bus maker said its operating loss for the year endingin March would be 12 billion yen, worse than analysts' forecastsof a 7.3 billion yen loss.
NEC Electronics Corp (6723.T) fell 8.3 percent to 688 yenafter it reported a 15.5 billion yen loss in July-September, farbigger than the same period a year earlier, and cut its annualoutlook on weaker sales of its cutting-edge system chips.
Among the slew of companies reporting after the close wereSharp Corp (6753.T), NEC (6701.T) and Nintendo Co Ltd (7974.OS).
But exporters lost ground. Chip-tester maker Advantest Corp(6857.T) tumbled 6.6 percent to 2,065 yen and electronicscomponents maker TDK Corp (6762.T) lost 2.3 percent to 5,020 yen.
The dollar was trading around 90.37 yen JPY=, down 0.4percent and retreating from a more than one-month high above 92yen hit earlier in the week. Investors fret about a stronger yenas it eats into exporters' profits when they are repatriated.
JAL rose 2.7 percent to 115 yen after earlier rising nearly10 percent. A government-appointed task force is set to submit arestructuring plan for JAL to Transport Minister Seiji Maehara onThursday, with Maehara set to hold a news conference shortlyafter the close.
Banks gained as well, helping brake the market's fall, asinvestors picked up sectors dependent on domestic demand whilethey sold exporter shares, a trader at a Japanese brokerage said.
The trader added the solid earnings announced on Wednesday byNomura Holdings (8604.T) also likely helped boost hopes for arecovery in earnings for the financial sector.
Mitsubishi UFJ Financial Group (8306.T), Japan's top bank,jumped 4.5 percent to 488 yen. Mizuho Financial Group (8411.T)climbed 4.1 percent to 179 yen and Sumitomo Mitsui FinancialGroup (8316.T) rose 1.6 percent to 3,150 yen.
Trade was extremely active, with 2.6 billion shares changinghands on the Tokyo exchange's first section compared to lastweek's daily average of 1.9 billion.
Declining shares outnumbered advancing ones by nearly 3 to 1. (Reporting by Elaine Lies; Editing by Edwina Gibbs)
Source: Reuters
