Nikkei falls on U.S. growth concerns; exporters weak

TOKYO (June 27): Japan's Nikkei share average slipped on Friday as concerns about U.S. economic growth hurt sentiment and as the stronger yen pulled down exporters.

The Nikkei dropped 0.6 percent to 15,216.73 points by late morning, but still not so far from a five-month high of 15,442.67 marked early this week.

For the week, the index has shed 0.9 percent so far. A milder-than-expected increase in U.S. consumer spending in May fanned suspicions about the strength of the economy following shockingly weak first quarter GDP data.

"The market thought that the U.S. economy was gaining momentum, but people started to question if that was even true," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"People blamed the cold weather for the weak January-March data, but if consumption is weak in the U.S., we need to be careful about U.S. growth going forward."

Against the yen, the dollar slipped to 101.65 after recovering from a near one-month low of 101.48.

Exporters were weaker, with Canon Inc falling 1.6 percent, Panasonic Corp sliding 0.8 percent and Nissan Motor Co shedding 0.9 percent. But analysts said foreign buying was limiting the losses.

According to latest data by the Tokyo Stock Exchange, foreigners were net buyers of Japanese stocks for the first three weeks of the month.

Bucking the weakness, engineering companies extended gains after Toyota Motor Corp on Wednesday said it will begin selling a hydrogen fuel cell electric vehicle this fiscal year.

Mitsubishi Kakoki Kaisha, which makes hydrogen stations, jumped 14 percent to 315 yen at one point, the highest since August 2008 and was the third most traded stock by turnover.

The broader Topix dropped 0.5 percent to 1,256.84, while the new JPX-Nikkei Index 400 slipped 0.5 percent to 11,431.31. - Reuters