Tokyo, Sydney, Hong Kong close down

The Nikkei lost ground for the third day in a row on a stronger yen

By Staff and wire reports

HONG KONG, China -- Markets in Japan and Australia slumped Thursday, closing down after pressure from a poor U.S. showing overnight.

In Tokyo, stocks slumped for the third day. The benchmark Nikkei share average lost 1.2 percent to 13,895.79.

The stronger yen and a 3.0 percent drop in Nasdaq on Wednesday slapped shares of Japan's bellwether techs and big exporters. But one trader saw support around 13,700.

Electronics giant Sony dipped 2.45 percent to 9,950 yen. Honda Motor Co. ended down 3.4 percent at 5,060 yen.

The broader TOPIX index shed 0.68 percent or 9.35 points to 1,365.88.

Yen hits exporters

The yen hit five-month highs on the euro and 11-week highs on the dollar on Thursday. It was trading below 120 to the U.S. dollar, at 119.48, after the close.

A stronger yen makes Japanese exports less competitive and hurts companies when they return sales they made in other countries to Japan.

"Domestic institutions were looking for reasons to unwind a good slice of their long positions in the tech sector. The yen and the Nasdaq gave them two very good ones," said Masayoshi Okamoto, a trader at Jujiya Securities.

The Nikkei is now down 1.9 percent since Monday and 4.5 percent below a five-month high of 14,556.11 hit on May 7. But it is well up from a 16-year low of 11,433.88 reached in March.

Semiconductor equipment makers found themselves under pressure from a bearish U.S. report on the sector.

Japan's top chip-equipment maker, Tokyo Electron Ltd., fell 1.64 percent to 9,000 yen.

Nikon Corp., one of the world's largest makers of the machines that etch circuits onto silicon chips, skidded 4.5 percent to 1,537.

Toshiba Corp., Japan's No. 1 chip producer, fell 3.0 percent to 752 yen. Industry rival NEC Corp. slipped 1.5 percent to 2,265 yen.

Banking sector rises

But the banking sector rose after Mitsubishi Tokyo Financial Group, Japan's third-largest bank, unveiled earnings.

It posted a group net loss of $1.0 billion (124.6 billion yen) for the fiscal year ended in March. That compared with a net profit of 173 billion yen the previous year, but it was better than the bank's forecast of a 137 billion yen loss.

Analysts do not expect great things as Japan's biggest banks report earnings. But they say it's best to get the numbers over with.

Hong Kong also closed down. The benchmark Hang Seng index dipped 0.2 percent to 13,810.60. Technology and telecom stocks dropped from the open after Nasdaq's fall.

Even companies that do most of their business in China, which have risen recently, lost ground.

China Mobile, the largest mobile-phone operator there, lost 0.7 percent to stand at HK$40.20. It is the second-largest Hang Seng component.

Legend Computer, China's largest computer maker, lost 2.5 percent to stand at HK$5.75.

Sinopec a bright spot in Hong Kong

One bright spot was Sinopec, which broke through a six-month high to end up 5.2 percent at HK$1.62. China's second-largest oil company said it would issue $1.2 billion in A shares on the Shanghai market.

It wants to use the money to buy an oil explorer and for two pipeline projects.

In Australia, stocks retreated from a record as cautious investors sold off after recent gains.

The Australian market has been one of the strongest performers this year but traders warn it risked looking overvalued.

The benchmark S&P/ASX 200 index fell 0.3 percent to 3,416.0. It is just below its record high of 3,444.3, set on Wednesday.

Media giant News Corp. dominates the index and was the main drag.

It lost 3.9 percent to A$17.20. Its American Depositary Receipts had fallen on Wall Street on Wednesday.

Big miners were also weaker. BHP, soon to merge with London's Billiton to form the world's largest diversified miner, led the way lower with a slide of 1.1 percent to A$23.11.

Other mining stocks, which have gained from gold's recent good run, lost ground, too.

South Korea ended slightly down for the day, a relatively strong performance given Nasdaq's drop.

The benchmark Kospi closed at 622.28, down 0.05 percent. Hyundai Securities helped the market climb back from early losses,

In Taiwan, the Taiex also weathered Nasdaq's dip. It closed up 0.3 percent at 5,226.79.

That was a strong performance given Taiwan's close ties to U.S. tech stocks. The index has gained 5.4 percent in the last three days.

Microchip maker Macronix rose 5.3 percent to T$35.90. It had closed up the daily 7 percent limit the previous two days.

Microchip foundry leader Taiwan Semiconductor Manufacturing Co. fell 0.5 percent to T$94.

Reuters contributed to this report.

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