Nikkei falls on US rate concern, exporters drop

TOKYO, June 6: The Nikkei average extended losses to shed 1.84 percent on Tuesday as Tokyo Electron Ltd and other technology exporters fell on concerns about possible U.S. interest rate hikes in Japan's key export market.

Sony Corp was down despite its plan to launch a digital single-lens reflex camera, while shares of real estate and brokerage firms lost ground as investors took profits.

''The focus is the United States and investors cannot be confident about her economy,'' said Kazuhiro Takahashi, general manager at equity planning and administration department at Daiwa Securities SMBC Co. Ltd.

U.S. Federal Reserve Chairman Ben Bernanke said the Fed needed to be vigilant, making sure inflation stays under control even as the U.S. economy starts to shift to a slower pace of growth. U.S. stocks plummeted on Monday, driving the Dow industrial average to its lowest close in three months.

''If the U.S. continues to tighten its credit grip, there is a possibility that the U.S. economy would have a hard landing,'' he added.

The Nikkei fell 288.99 points at 15,379.32 as of 0436 GMT. The TOPIX index declined 1.77 percent to 1,566.71.

On the technology sector, Tokyo Electron shed 3.8 percent to 7,630 yen while its peer Advantest Corp. fell 2.1 percent to 11,030 yen.

Sony fell 1.7 percent to 5,100 yen even after the company in the early afternoon said it would launch a digital SLR reflex camera in Japan on July 21, marking its entry into the high-end of the camera market now dominated by Canon Inc. and Nikon Corp.

Canon was down 1 percent at 7,840 yen and Nikon gave up 3.7 percent to 2,075 yen.

Shares of property and brokerage firms, which were one of the strong performers last year, gave in to profit-taking.

Japan's second-largest property developer Mitsubishi Estate Co. Ltd. fell 5.2 percent to 2,100 yen, the lowest since January, and third-ranked Sumitomo Realty&Development Co. Ltd. lost 5.3 percent to 2,610 yen.

In the brokerage sector, Nomura Holdings Inc. declined 2.9 percent 2,150 yen.

Selling from foreign investors also came into play.

Foreigners sold about 578 billion yen (.2 billion) of Japanese stocks on a net basis in May, according to the latest data available from the Tokyo Stock Exchange.

That marks the largest amount of net selling in a single month since the current bull market began in 2003, according to Hiroyuki Nakai, a chief strategist at Tokai Tokyo Securities.

''The Japanese stock market is close to bottoming out, that's for sure. We just don't have buyers around,'' said Zenshiro Mizuno, senior managing director at Marusan Securities Co. Ltd.

REUTERS