Roundup: Tokyo stocks fall for third straight session, securities weigh

TOKYO, Jan. 20, 2010 (Xinhua News Agency) -- Japan's Nikkei Stock Average edged down on Wednesday for a third consecutive session, as securities firms suffered following a downgrading of the industry by a major asset management firm.

Japan's key benchmark Nikkei fell 27.38 points, or 0.25 percent, from Tuesday, to 10,737.52, as investors took largely cautious stances ahead of further key U.S. earnings reports due out later this week as well as reports from Japanese firms, which are due on Thursday.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 5.04 points, or 0.53 percent, to 944.72.

Asian equities factored into the market's decline Wednesday as recent losses have been attributed to the possibility of further credit tightening measures from China's central bank, who raised its reserve ratio earlier in January and ordered two of its lenders to increase their reserves, sparking fears that China's rapid growth may be slowing, some brokers said.

Other experts played down the issue, stating that the central bank's move alone would do little to hinder continued economic development.

"China's bank news might have also affected investor confidence as it indicates the country is moving towards tightening policy, though it's hard to think the move would directly work to dampen an economic recovery at this moment," said Tomomi Yamashita, senior fund manager at Shinkin Asset Management.

Early gains on upbeat figures from Wall Street on Tuesday and a strengthening U.S. dollar were erased in the afternoon as investors took conservative positions ahead of the U.S. corporate earnings season swinging fully into gear later this week.

More pertinent to losses made on Wednesday was Credit Suisse Group (NYSE:CS) AG lowering its investment rating on Japan's brokerage industry to "market weigh" from "overweight", stating that investors should redirect their funds to banks, as fundraising issues pose less of a threat of late.

Subsequently, shares in securities firms tumbled, market insiders indicated, with Nomura Holdings Inc. (NYSE:NMR) Japan's largest brokerage firm falling 3.8 percent to 711 yen, following Credit Suisse cutting its rating on the firm from "outperform" to " neutral", citing a limited upside for the stock price.

Matsui Securities Co. Ltd. was similarly downgraded, with Credit Suisse citing an "unexpectedly large" decline in margin trading balances. Matsui Securities fell 3.7 percent to 654 yen and rival Daiwa Securities Group Inc. also closed down, losing 2. 43 percent to 482 yen.

Japan's turbulent air sector declined Wednesday, although Japan Airlines Corporation filing for bankruptcy protection on Tuesday had little impact on overall markets, as the news has been factored in and was broadly expected by investors.

JAL shares, which will be delisted from the exchange on Feb.