Japanese stocks fell by mid-afternoon on Monday with Sanyo Electric's surprising profit warning dragging down technology peers while profit-taking continued to weigh on recent high-flyers like real estate firms. Exporters, such as Toyota Motor Corp <7203.T> also wilted after another fall on Wall Street and on ongoing concerns about volatile moves in the currency market, analysts said. The dollar jumped against the yen on Monday, and was trading around 107.40 yen , up nearly one percent from 106.65 in late New York on Friday. "The currency volatility is hurting investors' appetite for exporters. Market sentiment is also dampened as buyers have started avoiding domestic stocks," said Masayoshi Okamoto, head of dealing at Jujiya Securities. "Sanyo's news added further pressure," he added. But he said the market's tone remained bullish amid optimism about Japan's economic recovery, limiting the retreat.
"One good thing is that people are still optimistic about Japan's macroeconomy and such optimism is encouraging investors to buy banks and several other domestic stocks on dips." The Nikkei average <.N225> lost 0.64 percent to 11,345.94 by 0501 GMT, extending a 0.57 percent fall in the previous session. The broader TOPIX index <.TOPX> shed 0.25 percent to 1,135.30. Shares in Sanyo Electric <6764.T> tumbled 5.33 percent to 497 yen. On Friday the company slashed its net profit estimate for the year to March 31 by 88 percent, hurt by poor sales of home appliances and a 15 billion yen ($140 million) investment loss. Among other technology stocks, NEC Corp <6701.T> fell 1.92 percent to 817 yen and Sony Corp <6758.T> shed 1.41 percent to 4,210 yen. A notable winner, however, was Mitsubishi Electric Corp <6503.T>, which rebounded after the company upped its full-year profit forecast in the afternoon. The stock was up 3.23 percent at 608 yen. Toyota, Japan's biggest auto maker, lost 1.33 percent to 3,710 yen, while smaller rival Nissan Motor Co Ltd <7201.T> fell 1.86 percent to 1,161 yen. The real estate sector also suffered big losses, with industry leader Mitsui Fudosan Co <8801.T> falling 3.42 percent to 1,215 yen. Mitsubishi Estate Co Ltd <8802.T> lost 1.69 percent to 1,337 yen, dragging down the real estate industry subindex <.IRLTY.T> by 1.59 percent. The sector had been bought in the past few sessions on expectations that government data for 2003 due later on Monday would show a slowdown in the fall in land prices. Bucking the market's bearish trend, however, Mizuho Financial Group Inc <8411.T> gained 0.48 percent to 415,000 yen and Sumitomo Mitsui Financial Group Inc <8316.T> advanced 0.99 percent to 716,000 yen. ($1=106.81 yen)///