TOKYO, March 1 (Reuters) The Nikkei average fell for the first time in five sessions on Wednesday, losing 1.49 per cent as exporters such as Kyocera Corp. declined after weaker-than-expected data raised concerns about U.S. economic growth and weighed on both Wall Street and the dollar.
Investors also unloaded Internet-related firms such as Softbank Corp. after U.S. tech bellwether Google Inc. warned that revenue growth from Internet-search advertising was slowing.
Shares in Rakuten Inc. may be in focus on Thursday. The Internet shopping mall operator said it would raise more than 0 million for financing and debt repayment by issuing new shares.
News of the weak data in the United States -- a key market for Japan's exporters -- weighed on Tokyo stocks, said Shigemi Nonaka, chairman of Polestar Investment Management.
''It was a bit of a negative surprise,'' he said.
The slowdown in the U.S. economy ''is one of the things that we'll have to be watching this year, and it is one of the reasons why stocks aren't likely to book aggressive advances'', he said.
A range of U.S. economic data released on Tuesday, including existing home sales and consumer confidence, was below expectations, fuelling concern about growth in the world's biggest economy.
That helped push the yen to its highest level in a month, weighing on shares of exporters. A stronger yen is a minus for exporters, as it eats into profits when dollar-denominated earnings are brought home.
Electronics components maker Kyocera fell 2.4 per cent to 10,150 yen. Sony Corp. lost 1.6 per cent at 5,440 yen, falling for a second session. Toyota Motor Corp., the world's second-biggest auto maker, lost 1.6 per cent to 6,150 yen.
Yahoo Japan Corp., the country's biggest Internet portal, lost 2.9 per cent to 134,000 yen, following the fall in shares of Google.
Internet and communications conglomerate Softbank, which owns 42 per cent of Yahoo Japan, slid 3.9 per cent to 3,460 yen.
But shares in Elpida Memory Inc. rose 1.6 per cent to 4,340 yen, after the chip maker said current quarter prices are likely to be stable or firmer than the previous quarter, compared with an earlier outlook for a decline.
The head of Elpida's Hong Kong operations, speaking at the Reuters Global Technology, Media and Telecoms Summit, also said that earnings forecasts for January-March were conservative.
RETAIL INVESTORS CRIMP VOLUME Slower trade activity due to the absence of many retail investors has weighed on the market in recent sessions, said Katsuhiko Kodama, a senior strategist at Toyo Securities.
Many retail investors have been holding back following the stock market tumble prompted by an investigation into Internet firm Livedoor Co.
''The market lacks the kind of trade volume needed to push it higher,'' Kodama said.
''There were a lot of investors who were burned (by the Livedoor fall-out), and a lot of them have yet to come back to the market,'' he said.
Individual investors are no longer as bullish as they were on Japanese stocks, because of concerns that foreigners are pulling away from the market as well as the Livedoor scandal, a monthly Reuters survey showed on Wednesday.
Shares in Seven Seven&I Holdings Co. fell 2.1 per cent to 4,680 yen after Asia's second-largest retailer by sales cut its 2005/06 net profit forecast by 25 per cent on Tuesday.
But shares in Japan Airlines Corp. rose 4.8 per cent to 326 yen, after domestic newspapers reported the airline will replace its chief executive in a bid to end internal strife at Asia's biggest carrier.
Trade activity on Wednesday hit its lowest level so far this week, with 2.1 billion shares changing hands on the Tokyo exchange's first section.
Decliners swept past advancers by a ratio of more than 5 to 1.
REUTERS SD KP1454