Nikkei ends at 13-month low

But the Nikkei pared losses in the afternoon after Jiji news agency quoted Japanese Prime Minister Naoto Kan as saying foreign exchange moves are rough,prompting speculators to cover short dollar positions.

Market sources also said the Bank of Japan checked exchange rates with banks in the market earlier on Thursday in a way that went beyond their usual contact with them.

8220;A rise in the dollar following the report about remarks from Kan likely helped the stock market recover after selling had gone too far,8221; said Yumi Nishimura,deputy general manager at Daiwa Securities Capital Markets.

8220;But most people in the market think that even if Japan were to intervene alone,the impact would be limited.8221;

The benchmark Nikkei slipped 80.26 points to 9,212.59,its lowest finish in more than a month. It earlier fell as much as 2.4 per cent to 9,065.94,its lowest since July 13,2009.

The broader Topix fell 0.8 per cent to 827.78.

The yen8217;s advance and a weakening outlook for global demand continued to batter shares of Japanese exporters.

The precision machinery sector has lost about 19 per cent so far this year,underperforming a 13 per cent decline in the Nikkei and a 2.3 per cent drop in the Standard amp; Poor8217;s 500 Index.

Uncertainty over currency moves weighed on the market,with risk-money appearing to be shifting from stocks to assets like bonds. But buying of Tokyo stocks on dips by investors such as pension funds helped provide support,market players said.

8220;The scary scenario would be if some big algorithmic trading relating to stocks and currencies were to take place in thin summer trade. That could further push down the market,sharply and rapidly,8221; said Hiroaki Kuramochi,chief equity marketing officer at Tokai Tokyo Securities