Japan's Nikkei average slipped 2 percent on Monday, briefly touching a two-month low as the euro's fall to a four-year trough and slides in overseas shares raised fears the global economy could sustain more damage than expected, hitting exporters such as Canon Inc.But Mizuho Financial Group rose over 1 percent after Japan's second-largest bank by assets forecast a near doubling of profit this year as the economy recovers, prompting short-covering.Astellas Pharma pared losses after it said it would buy U.S. biotech OSI Pharma for $4 billion in cash.The euro fell to a four-year low against the dollar on Monday as investors worried that harsh spending cuts mandated by a bailout plan may choke off a fragile recovery in the 16-country euro zone. Analysts said a general rise in the yen would weigh on shares as well."Greece itself isn't as much of a concern as the fact that euro zone countries in good fiscal shape, such as Germany and France, are going to be putting out a lot of funds to help bail Greece out," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities."There's inevitable worry about how far they'll be dragged into things, the impact on European shares, and then on the global economy."U.S. stocks fell on Friday on a combination of weak earnings from retailers, Senate backing for limits on credit card fees and concerns over the sustainability of European public debt.The benchmark Nikkei slipped 207.50 points to 10,255.01 after briefly falling as low as 10.254.27, its lowest since early March, and looked on track for a two-month closing trough. The broader Topix fell 1.5 percent to 922.04.The Nikkei fell below its 200-day moving average, currently around 10,350, for the first time in over a week.Market players said that should the benchmark fall decisively below 10,257.32, the low touched during a May 7 tumble that trimmed more than 3 percent from the average, the next level would be the psychological support level of 10,000.The Nikkei's relative strength index (RSI) fell to 36.6 on Monday. Anything from 30 downwards is considered oversold."There's a lot of nervousness still about the tough fiscal situation in the euro zone, and while Japanese earnings were good there's a lot of uncertainty about what lies ahead over the next year, especially given the stronger yen," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.The euro was down 0.3 percent against the yen at 113.66 yen and the dollar slipped 0.2 percent against the Japanese currency to 92.30 yen .Mizuho Financial was one of the strongest performers, climbing over 3 percent at one point even though it said on Friday it would raise about $8.6 billion in a share offering.But its better-than-expected profit forecast underscored the brightening outlook for Japan's banking industry thanks to a decline in bad loans and a modest recovery in the world's second-largest economy, and set off short-covering, market players said.NTT jumped 3.6 percent to 3,860 yen after Japan's largest telecom firm said it would cancel all of its 251 million treasury shares, or about 16 percent of shares outstanding, over two years.(Reporting by Elaine Lies; Editing by Joseph Radford)(For more business news on Reuters Money visit http://www.reutersmoney.in)News posted by www.newsinfoline.com
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