Nikkei Slips on Economic Concerns

Japan's Nikkei stock average edged down 0.6 per cent on Tuesday, with exporters such as Sony Corp weighed by a strong yen and investors locking in profits in the face of long-term uncertainty about the economy. Bucking the trend, Canon Inc climbed 3 per cent after it said on Monday it plans to buy Dutch copier and printer maker Oce for 730 million euros ($1.1 billion), in a challenge to rivals Ricoh and Xerox.

US stocks rose to fresh 13-month closing highs after Federal Reserve Chairman Ben Bernanke reinforced expectations that interest rates would stay low to spur growth.
But Tokyo market players said a host of domestic factors, including economic uncertainty amid renewed talk of deflation and the sense that government initiative on this is lacking, were keeping Japanese shares under pressure.

"There's talk about government references to deflation, but we're not seeing a lot of concrete plans from them in response to this," said Hiroaki Kuramochi, head of the equity division at Tokai Tokyo Securities.

National Strategy Minister Naoto Kan, when asked about his remark on Monday that Japan was edging toward deflation, said it was not just his general impression but was based on objective data.

In thin trade, the benchmark Nikkei lost 61.25 points to 9,729.93 per cent, while the broader Topix shed 0.4 per cent to 857.00, its lowest close since mid-July.
The Democrat-led government, which took office in mid-September, is caught between a rock and a hard place in its economic management. Bond yields have risen this month as investors fret over a surge in issuance as tax revenues slide, but government stimulus is driving economic growth so a cut in state spending could send the economy back into recession.