Nikkei drops two percent

The Nikkei stock average lost more than 2 percent on Thursday after the Federal Reserve cited significant risks to the US economy, while Softbank Corp plunged to its lowest since July 2010 on a report it would lose exclusive rights to sell the iPhone in Japan.
Some strategists said selling could intensify after September 27, which is the last day for investors to buy many Japanese stocks and still get dividends on them for the April-September half year. "Once the dividend-buying factor is no longer supporting the market next week, we could see a tough situation, and the Nikkei could break below 8,500," said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities.
Market participants said Tokyo's losses were also due in part to domestic position adjustments ahead of the end of the April-September half-year this month, when investors often lock in profits. But market players say attractive valuations still support the Tokyo market. The Nikkei has lost more than 15 percent since early July, when it last traded above 10,000, while the Standard & Poor's 500 Index lost about 13 percent in the same period.
The Nikkei ended down 2.1 percent at 8,560.26. It was trading below its 25-day moving average of 8,756, but remained above support at its September 14 low of 8,499.34, which was its lowest intraday level since March. The broader Topix index slipped 1.7 percent to 744.54.
Also weighing on Japanese shares on Thursday were reports from China that suggested the world's No 2 economy may not be able to pick up the slack from flagging US and European growth. The decline in the Nikkei was, however, more moderate than Wall Street, which slid 3 percent for its worst drop in a month after the Fed's announcement, with selling accelerating as volume spiked in the last hour of trading.
Shares of Softbank, which has long been the sole provider of Apple Inc's iPhone in Japan, plunged 12.3 percent to 2,282 yen. It earlier sank as low as 2,271 yen, its lowest point in 14 months, on a report that rival KDDI Corp will start selling the iPhone 5 in November. KDDI initially rose, but then gains unravelled and its shares fell 0.8 percent to 624,000 yen.
Softbank and KDDI were the heaviest-traded shares by turnover. Sumitomo Mitsui Financial Group, the fifth-most traded issue by turnover, fell 1.8 percent to 2,089 yen, while Mitsubishi UFJ Financial Group shed 1.5 percent to 332 yen. Nomura Holdings lost 4.8 percent to 281 yen. Volume was slightly below recent daily averages, with about 1.70 billion shares trading on the Tokyo Stock Exchange's main board. That fell short of last week's average of 1.75 billion shares, but topped Wednesday's volume of about 1.44 billion.