Nikkei ends down 1.3 pct

Japan's Nikkei average slipped 1.3 per cent on Tuesday,erasing earlier gains.

Japan8217;s Nikkei average slipped 1.3 per cent on Tuesday,erasing earlier gains as exporters fell on a stronger yen,with the benchmark poised for its worst quarter since Lehman Brothers failed in 2008.

Charts turned ugly as well,with the Nikkei8217;s MACD poised for a bearish cross and its slow stochastic,which gives near-term signals on market trends,edging down in oversold territory.

Trade was thin after volume hit a four-month low on Monday,and market players said it was likely to stay that way as the market awaits a series of economic indicators this week including the Bank of Japan8217;s quarterly 8220;tankan8221; survey of corporate sentiment on Thursday and US jobs data on Friday.

Though the Nikkei edged up in morning trade,it reversed course from the start of the afternoon as the yen advanced across the board,with Japanese exporters repatriating profits before the second quarter ends later this week.

8220;It doesn8217;t seem to be a true risk aversion scenario since the euro isn8217;t falling as dramatically,what we8217;re seeing is a general rise in the yen,8221; said Nagayuki Yamagishi,a strategist with Mitsubishi UFJ Securities.

The dollar fell 0.7 per cent to 88.79 yen,its lowest in six weeks,while the euro lost 0.9 per cent to 108.72..

The Nikkei shed 123.27 points to 9,570.67,with the broader Topix slipping 1.0 per cent to 852.19.

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8220;The current dollar level is pretty tough for the market,and when the day8217;s falls in Shanghai stocks are added in the impact is significant,8221; said Noritsugu Hirakawa,a strategist at Okasan Securities.

8220;This whole situation is fanning fears about Japanese results.8221;

Shanghai shares were down 3.9 per cent as investors pulled funds from the market to prepare for a major IPO by Agricultural bank of China.

The benchmark Nikkei is poised to book its worst quarter since October-December 2008 as European debt worries push investors to curb their willingness to bet on risky assets,including equities.

For the quarter ending on Wednesday it has shed about 12 per cent so far,compared with a 21 per cent drop in the quarter that finished in December 2008,following the collapse of Lehman Brothers.

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Tuesday8217;s slide was worsened by the presence of a gap between 9,645 and 9,542 that opened at the start of a brief rebound that began on June 11,Yamagishi said,adding that he thought support would hold at 9,542 for now.

The next support level is 9,400,around the level of a six-month low struck on June 10.