Nikkei declines as investors fret U.S. slowdown

TOKYO, June 5 (Reuters) The Nikkei average fell 0.77 percent on Monday as exporters such as Fanuc Ltd. declined after weaker-than-expected U.S. jobs data increased concern about a slowdown in a key market for Japanese products.

Stock investors largely shrugged off statements from Japan's best-known fund manager, Yoshiaki Murakami, who admitted to violating insider trading laws and said he would likely be charged.

Surprisingly soft U.S. jobs data on Friday helped raise concerns that Japanese exporters will soon face slackening sales in the world's largest economy, said Yoku Ihara, manager of investment information at Retela Crea Securities.

''Right now everyone seems to be worried about a slowdown in the U.S. economy.... It's one thing if we see a gradual decrease, but investors are worried that we will be hit with a sudden decline in growth,'' he said.

Investors were also worried about a slowing economy in tandem with higher energy prices, Ihara said.

The Nikkei finished 121 points lower at 15,668.31. The TOPIX index declined 0.70 percent to 1,594.92.

Fanuc, a maker of industrial robots, fell 2.2 percent to 10,110 yen -- the biggest contributor to the Nikkei's fall.

Toyota, the world's second-biggest auto maker, ended down 1.3 percent at 6,040 yen. Rival Nissan Motor Co. Ltd. slid 1.8 percent to 1,348 yen.

Kyocera Corp., a maker of electronic components, fell 1.8 percent to 9,450 yen.

MURAKAMI SHRUGGED OFF, FOR NOW Market participants largely shrugged off news that shareholder activist Murakami said he had violated insider trading laws and would immediately resign from his fund.

Shares in companies in which the fund has holdings, such as Sumitomo Warehouse Co. Ltd. and Matsuzakaya Co. Ltd., recouped losses after posting steep falls on Friday. Sumitomo Warehouse was up 8 percent at 798 yen and retailer Matsuzakaya gained 3.7 percent to 778 yen.

But the shares of the 30-some firms held by Murakami's fund could tumble again if the fund were to be liquidated, said Shigemi Nonaka, chairman of Polestar Investment Management.

''If the fund is dissolved, it would be forced to unload its shares in about 30 or so companies, that could lead to another sell-off in the broader market,'' he said.

''Right now we just don't know what will happen.'' Shares of oil developer INPEX Holdings Inc. and other energy-related firms advance after crude oil futures rose above a barrel on Friday, the highest in nearly one month.

INPEX added 2.2 percent to 970,000 yen while Japan Petroleum Exploration Co. Ltd. rose 1.5 percent to 7,510 yen.

The gains help make the mining sector IMING.the top percentage gainer among the TOPIX's 33 industry groups Shares of Elpida Memory Inc. gained 4.3 percent to 5,090 yen following a report the firm will begin shipping next-generation memory chips later this year.

Elpida will begin shipping prototypes of phase-change memory chips -- known as PRAM -- later this year, the Nihon Keizai business daily said on Monday.

The chips combine the high speed of current DRAM memory chips with the large memory capacity of flash memory chips, the paper added.

Trade was the slowest in nearly a week, with 1.52 billion shares changing hands on the Tokyo exchange's first section.

Decliners outnumbered gainers by a ratio of nearly 2 to 1.

REUTERS CS RN1300