Nikkei loses 1.3 pct as Nissan, exporters fall

TOKYO, Feb 5 (Reuters) Tokyo's Nikkei share average lost 1.30 percent on Monday, retreating from a 10-month closing high in the prior session, led down by automakers after Nissan Motor Co. slashed its earnings forecast on weak sales.

Investors were also taking profits on auto and tech-related shares amid speculation that pressure would be put on Japan to stop the yen's slide at a meeting of Group of Seven finance officials later this week.

Trade in Nikkei 225 futures on the Singapore Exchange restarted on Monday after it was halted because of technical problems, but the resumption did little to support the Tokyo market in afternoon trade.

Yutaka Shiraki, senior equity strategist at Mitsubishi UFJ Securities, said investors were booking profits after the Nikkei retreated from a six-year high hit last week, and after the corporate earnings season peaked out.

''Overall, corporate earnings reports showed their profits were expanding smoothly,'' he said. ''But figures from the high-tech sector were mixed, prompting profit-taking by investors.'' However, he added, the Nikkei is unlikely to fall much from the current level, as long as the dollar stays above 120 yen and the soft-landing scenario of the U.S. economy remains intact.

''Investors are eager to buy on dips, expecting the market's downside will be limited,'' Shiraki said.

The Nikkei was down 228.27 points at 17,318.84 at 0447 GMT, wiping out its rally of the prior two sessions.

The broader TOPIX index lost 1.55 percent to 1,715.36.

Shares of Nissan tumbled 9.2 percent to 1,371 yen after the automaker on Friday reported a worse-than-expected 23 percent slide in quarterly net profit and slashed its full-year forecasts.

Among other automakers, Toyota Motor Corp. slipped 1.8 percent to 7,810 yen and Honda Motor Co. lost 3.0 percent to 4,560 yen. Tyre maker Bridgestone Corp. gave up 2.5 percent to 2,500 yen.

The dollar strengthened to about 120.80 yen in Tokyo from 121.37 yen hit on Friday. A stronger yen is bad for exporters because it hurts the competitiveness of their products overseas and cuts into profits when brought back to Japan.

Selling was not limited to auto-related shares.

Digital camera and copier giant Canon Inc. lost 2.5 percent to 6,140 yen, drugmaker Takeda Pharmaceutical Co. fell 2.0 percent to 7,840 yen, and advertising firm Dentsu Inc. slipped 1.9 percent to 356,000 yen.

Among winners, shares of Victor Co. of Japan Ltd. (JVC) surged 15 percent to 603 yen. Private equity firms Permira, Texas Pacific Group and CCMP Capital Asia are in the race to buy JVC, owned by Panasonic maker Matsushita Electric Industrial Co. Ltd., a source familiar with the situation said on Monday.

REUTERS CS VV1135