Nikkei slips 0.6 pct as firm yen hits exporters
* Exporters hit as dollar briefly hits 7-wk low below 92 yen
* Disappointing U.S. jobs data stokes economy worries
* Dainippon Sumitomo up after news to bid for U.S. company
TOKYO, Sept 3 (Reuters) - Japan's Nikkei stock average lost0.6 percent on Thursday as exporters fell on worries about theU.S. economy after dismal jobs data, but Dainippon SumitomoPharma (4506.T) rose on news it would bid for a U.S. drug firm.
Dainippon Sumitomo opened up by nearly 8 percent after asource with knowledge of the situation said the firm planned tooffer about $2.7 billion to acquire U.S. drugmaker Sepracor(SEPR.O). [ID:nN02545273]
The Japanese drugmaker later confirmed the deal, saying ithad agreed to buy Nasdaq-listed Sepracor for $2.6 billion.Dainippon Sumitomo's shares ended the day 1.2 percent higher at1,025 yen. [ID:nTKU105525]
The benchmark Nikkei .N225 lost 65.82 points to 10,214.64,while the broader Topix fell 0.7 percent to 942.77.
"We're in a situation now where expectations outpaced realityover the last two months. This is just a natural adjustment, eventhough the economy is over the worst," said Hiroichi Nishi,general manager at the equity division of Nikko CordialSecurities.
Trade fell off, with 1.75 billion shares changing hands onthe Tokyo exchange's first section compared with last week'sdaily average of 1.92 billion shares.
The dollar briefly dropped below 92.00 yen for the first timesince mid-July, pressuring exporters. The dollar later recoveredslightly and was 0.2 percent higher on the day at 92.36 yen.JPY=
A U.S. labour market report showing more private-sector joblosses in August than forecast made investors nervous ahead ofFriday's highly anticipated monthly jobs data from the U.S. LaborDepartment, sending Wall Street shares lower. [ID:nN02321193]
In addition to the yen's gains against the dollar, marketplayers may be bracing for the possibility that a recovery inleading economic indicators such as the U.S. Institute for SupplyManagement's manufacturing index could start to lose steam, saidHideyuki Ishiguro, a supervisor at Okasan Securities' investmentstrategy department.
"The trajectory of leading indicators may start to flatten,and I think many people are worried about that," he said.
The Nikkei could fall towards 10,000 if the dollar were tofall below its July trough of 91.73 yen, Ishiguro said, but addedthat the Nikkei may start heading higher once companies startannouncing their corporate earnings in October.
"Earnings will probably show significant improvement andpeople will have little choice but to focus on that," he said,adding that the Nikkei may rise above 11,000 and possibly 12,000.
Exporters slid on the yen's strength. Investors fret about astronger yen as it eats into exporter profits when repatriated.
"The pace of the yen's rise appears to be picking up," saidMasayoshi Okamoto, head of dealing at Jujiya Securities.
Honda Motor Co (7267.T) lost 2.4 percent to 2,840 yen, ToyotaMotor Corp (7203.T) slipped 1.8 percent to 3,850 yen and CanonInc (7751.T) edged down 1.4 percent to 3,450 yen.
Ishiguro at Okasan Securities said automakers were one sectorthat seem particularly likely to show an improvement in earnings,although there are some concerns about the impact from an end tothe U.S. "Cash for Clunkers" programme.
Thomson Reuters Proprietary Research shows that consumerdiscretionary and technology sectors have seen the biggest upwardrevisions to 12-month forward eanings in the past month, andfinancials, consumer discretionary and the information technologysector are expected to post the highest earnings growth rates inthe next 12 months.
Among the consumer discretionary sector, Toyota Motor, NissanMotor (7201.T), and Sony Corp (6758.T) are the biggestcontributors to dollar-level earnings growth, according toThomson Reuters Proprietary Research. (Additional reporting by Masayuki Kitano)
Source: Reuters
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