Japan stocks slip on selling of banks, exporters

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TOKYO, Oct 25 (Reuters) Japanese stocks slipped on Thursday, undercut by sales of bank shares such as Mizuho Financial Group after Merrill Lynch reported a big loss, with exporters also hit by a stronger yen.

Merrill, the world's largest brokerage, reported a TOKYO, Oct 25 (Reuters) Japanese stocks slipped on Thursday, undercut by sales of bank shares such as Mizuho Financial Group after Merrill Lynch reported a big loss, with exporters also hit by a stronger yen.

Merrill, the world's largest brokerage, reported a $2.3 billion loss and write-downs of $7.9 billion on Wednesday for bad bets on mortgages and leveraged loans.

But trade remained relatively thin ahead of a flood of Japanese earnings results due out from giants such as Sony Corp, Canon Inc and Honda Motor after the close.

''The Merrill losses are showing the market that it will take a while to contain the impact of the subprime mortgage crisis,'' said Hiroichi Nishi, general manager of the equity division at Nikko Cordial Securities.

''It now seems there could be an impact on US consumption, which is really making people worried.'' Weak US housing data and the massive Merrill losses helped the yen gain against the dollar, in turn pushing down exporter shares such as Canon, which by 0407 GMT had slid 3.7 percent to 5,520 yen.

The benchmark Nikkei average was down 0.6 percent at 16,264.20 and the broader TOPIX index down 1.1 percent at 1,547.16.

''The market is really waiting for the earnings out later today, with the key issue being whether profit forecasts are revised upwards or not,'' Nishi said.

Fallout from the subprime loan mess was on the minds of Japanese retail investors, who turned bearish on domestic equities in October, a Reuters survey showed on Thursday.

The survey, covering 1,477 retail investors and conducted Oct.

15-18, showed a slide in investor confidence, with the sentiment index falling to minus 22, down sharply from zero in September and the worst since the survey began in January 2006.

Among Thursday's casualties were Mizuho Financial, which was down 4.6 percent at 585,000 yen. Sumitomo Mitsui Financial Group slipped 2.7 percent to 818,000 yen and Mitsubishi UFJ Financial Group fell 2.2 percent to 1,014 yen.

Steel firm JFE Holdings Inc, which is due to announce its earnings at 0500 GMT, was down 3 percent at 7,080 yen.

Daiichi Sankyo Co tumbled 7.1 percent to 3,240 yen after it and Eli Lilly and Co halted two small trials of their most important experimental medicine, the blood-clot preventer prasugrel.

REUTERS SKB BD1020 .3 billion loss and write-downs of .9 billion on Wednesday for bad bets on mortgages and leveraged loans.

But trade remained relatively thin ahead of a flood of Japanese earnings results due out from giants such as Sony Corp, Canon Inc and Honda Motor after the close.

''The Merrill losses are showing the market that it will take a while to contain the impact of the subprime mortgage crisis,'' said Hiroichi Nishi, general manager of the equity division at Nikko Cordial Securities.

''It now seems there could be an impact on US consumption, which is really making people worried.'' Weak US housing data and the massive Merrill losses helped the yen gain against the dollar, in turn pushing down exporter shares such as Canon, which by 0407 GMT had slid 3.7 percent to 5,520 yen.

The benchmark Nikkei average was down 0.6 percent at 16,264.20 and the broader TOPIX index down 1.1 percent at 1,547.16.

''The market is really waiting for the earnings out later today, with the key issue being whether profit forecasts are revised upwards or not,'' Nishi said.

Fallout from the subprime loan mess was on the minds of Japanese retail investors, who turned bearish on domestic equities in October, a Reuters survey showed on Thursday.

The survey, covering 1,477 retail investors and conducted Oct.

15-18, showed a slide in investor confidence, with the sentiment index falling to minus 22, down sharply from zero in September and the worst since the survey began in January 2006.

Among Thursday's casualties were Mizuho Financial, which was down 4.6 percent at 585,000 yen. Sumitomo Mitsui Financial Group slipped 2.7 percent to 818,000 yen and Mitsubishi UFJ Financial Group fell 2.2 percent to 1,014 yen.

Steel firm JFE Holdings Inc, which is due to announce its earnings at 0500 GMT, was down 3 percent at 7,080 yen.

Daiichi Sankyo Co tumbled 7.1 percent to 3,240 yen after it and Eli Lilly and Co halted two small trials of their most important experimental medicine, the blood-clot preventer prasugrel.

REUTERS SKB BD1020

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