Nikkei falls 1.5 pct after U.S. retreat

TOKYO, Oct 30 (Reuters) The Nikkei average fell 1.5 percent to its lowest level in more than two weeks on Monday as a retreat in U.S.

stocks after data showing weak quarterly growth in the world's biggest economy dragged down exporters such as Toyota Motor Corp.

Data released before the opening showed Japan's industrial production fell 0.7 percent in September from a month earlier, slightly better than a median market forecast of a 1.0 percent decline.

Yutaka Shiraki, a senior strategist at Mitsubishi UFJ Securities, said the headline number was in line with expectations and that a rise in inventories of electronic parts and devices could be temporary ahead of the year-end shopping season, given signs that U.S. individual spending remains strong.

''Instead of the domestic data, the market is rather reacting to a fall in U.S. stocks,'' Shiraki said. ''A rise in the yen is also negative, since weakness in the yen has been among key factors behind solid earnings reports,'' he said.

The Nikkei was down 249.41 at 16,419.66 as of 0052 GMT, its lowest since Oct. 12. The broader TOPIX index was down 1.37 percent at 1,628.19.

Earnings continue to be in focus. Major companies to release their earnings results on Monday include Nippon Paper Group Inc. , Tokyo Gas Co. Ltd., Mitsubishi Motors Corp., Mitsubishi Electric Corp., Nippon Oil Corp., TDK Corp. and Kyocera Corp.

Shares of Toyota, the world's second-biggest auto maker, lost 2.1 percent to 6,940 yen. Those of rival Honda Motor Co. Ltd. fell 1.9 percent to 4,190 yen.

Chip production equipment maker Advantest Corp. fell 2.5 percent to 5,790 yen, becoming one of the biggest negative contributors to the Nikkei.

Advantest trimmed its full-year forecast on Friday to below market expectations amid slowing momentum in sales of chip testers.

Adding further pressure was a fall in shares of U.S. chip and chip equipment makers on Friday following a Goldman Sachs report which said demand for motherboards, a key computer hardware component, was falling.

Tokyo Electron Ltd., the world's second-biggest chip production equipment maker, fell 3.2 percent to 8,780 yen.

But shares of Fanuc Ltd., an industrial robot maker, rose 2 percent to 9,660 yen. The company raised its full-year group net profit forecast by 16.7 percent on Friday after posting a 17.9 percent rise in profit for the six months to September, helped by healthy corporate capital spending.

Reuters DH VP0718