Nikkei reverses early gains, exporters fall

Tokyo, June 27 : The Nikkei average fell 0.25 percent on Tuesday as exporters, such as Sony Corp., fell amid concerns about further U.S. rate increases.

Investors were looking ahead to the Federal Reserve's policy-setting meeting on Wednesday and Thursday. The U.S.

central bank is expected to lift its benchmark lending rate to 5.25 percent and may give an indication of interet rate outlooks.

Higher U.S. rates may cut into consumers' spending at a key market for Japanese products.

''The upcoming event is casting shadow over us,'' said Susumu Abe, manager at Mito Securities' information and investment department, referring to the Fed meeting.

The Nikkei was down 37.38 points at 15,115.02 as of 0109 GMT.

It had gained in early trading but fell back after failing to reach the key technical level of 15,208 as of Monday's close, its 25-day moving average.

The TOPIX index was down 0.27 percent at 1,544.76.

Sony lost 1.8 percent to 4,880 yen. The decline came despite Chief Executive Howard Stringer's confidence in the firms new PlayStation 3 game console.

Asked about the high price of the console at a media roundtable on Monday, Stringer said the advanced technologies in the new machine will help it compete favourably with Microsoft Corp.'s Xbox 360 and Nintendo Co. Ltd.'s Among other exporters, Canon Inc., the world's biggest digital camera maker, was down 1.8 percent at 5,370 yen and Honda Motor Co. Ltd., Japan's third-biggest auto maker, was down 1.5 percent at 3,590 yen.

Non-ferrous metals firms, such as Sumitomo Metal Mining Co.

Ltd., rose on hopes of industry consolidation after Phelps Dodge said it would buy two Canadian firms to create the world's largest nickel miner.

Sumitomo Metal Mining, Japan's biggest gold producer, was up 1.8 percent at 1,392 yen.

Reuters