Nikkei hits 1-week low on weak Wall Street; Sharp tumbles on S&P rating cut

TOKYO: Japan's Nikkei share average dropped to a one-week low on Wednesday morning after weak performances in US shares triggered profit-taking, while Sharp Corp dived after Standard & Poor's cut its credit rating.
The Nikkei dropped 1.0 per cent to 18,630.97 in midmorning trade after slipping as far as 18,586.84, the lowest level since February 25.
A weak-yen trend has paused, weighing on sentiment. The dollar backed off from Tuesday's high of 120.27 yen, falling 0.1 per cent to 119.62 yen. Analysts said investors remain cautious as they look to US jobs and wage data on Friday for further clues on when the Federal Reserve may raise interest rates. "Whether this selling is short-term profit-taking or can lead to a solid correction depends on how the market perceives the US jobs data," said Isao Kubo, equity strategist at Nissay Asset Management. "If wages are better than expected and trigger worries about a sooner-than-later rate hike, there may be some more selling in stocks." Sharp tumbled as low as 6.5 per cent after S&P cut its long-term ratings on the company to 'CCC+' following news that it plans to ask its main lender banks for a debt-for-equity swap. Sumco Corp dived as much as 12 per cent to a 1-1/2-week low after saying it will issue up to 60 billion yen in common shares. Exporters were weaker, with Honda Motor Co dropping 1.0 per cent and Toyota Motor Corp 0.8 per cent. Bucking the weakness, NGK Insulators Ltd, world's largest producer of insulators for power utilities, rose 3.0 per cent to 2,401 yen, the highest since Jan. 30, after SMBC Nikko Securities raised its rating to "outperform" from "neutral", citing strong business opportunities in China.