Nikkei falls 1.2 pct, Aiful news hurts financials
* Financial sector, profit-taking dent overall market
* Trade cautious on policy uncertainty, before 5-day holiday
TOKYO, Sept 18 (Reuters) - Tokyo's Nikkei average fell 1.2percent on Friday, hurt by financials after consumer finance firmAiful Corp (8515.T) said it would ask creditors to push backrepayments, while exporters such as Advantest Corp (6857.T) loststeam after a strong run-up.
Investors took a breather after gains that pushed the Nikkeito end above its 25-day moving average the previous day, marketplayers said. Trade was also cautious ahead of a five-day holidayin Japan from Sept. 19-23.
"Investors who bought stocks yesterday are adjustingpositions as they head into the holiday," said Kenichi Hirano,operating officer at Tachibana Securities.
In moderate trade, the benchmark Nikkei .N225 slipped128.39 points to 10,315.41, after gaining 1.7 percent on Thursdayto hit a one-week closing high.
The broader Topix retreated 1 percent to 930.03.
"Investors don't really want to touch financial shares. TheAiful news came as a slight shock ... and added to uncertaintyin the sector that already existed about the new government'spolicies," Hirano said.
Shizuka Kamei, the new minister for banking and marketregulation, has said he would like to introduce a moratorium onsome loan repayments to help small and midsized businesses andindividuals struggling from the economic downturn, sending bankshares lower. [ID:nT284678]
FINANCIALS HURT
Aiful was untraded due to a glut of sell orders at 134 yen,down 27.2 percent from Thursday's close.
Aiful said it would ask creditors to push back repayments onabout $3 billion in debt as it faces difficulty raising funds andplans for more restructuring. [ID:nT104420]
Rival lenders Promise Co Ltd (8574.T) tumbled 9.9 percent to544 yen and Takefuji Corp (8564.T) also sank 9.9 percent to 418yen.
Shares in Aiful's main creditors Sumitomo Trust and BankingCo (8403.T) shed 1.5 percent to 470 yen, and Aozora Bank (8304.T)shed 3.7 percent to 130 yen.
The other financial subindex .IFINS.T, which lost 6.3percent, was the top percentage decliner among subindexes.
Exporters that had gained sharply lost ground, also weighingon the overall market. Advantest Corp (6857.T) slipped 1.9percent to 2,365 yen and Kyocera Corp (6971.T) retreated 1.4percent to 8,040 yen.
But West Japan Railway (9021.T) bucked the market trend androse 0.9 percent to 338,000 yen after Deutsche Bank raised itstarget price on the company to 394,000 yen from 376,000 yen.
Analyst Seigo Ando said there would only be a limited impactfrom new government's policy of scrapping highway tolls and addedthat the extension of the Kyushu bullet train planned for thespring of 2011 will have a greater impact than the marketexpects.
Some 1.1 billion shares changed hands on the Tokyo exchange'sfirst section, in line with last week's morning average.
Declining stocks beat advancing ones by nearly 7 to 1. (Editing by Joseph Radford)
Source: Reuters
