Tokyo, Oct 18: The Nikkei average fell 0.72 percent by late morning on Wednesday as auto makers such as Toyota Motor Corp. and other major exporters were hit by concern their shares may be overpriced and after a rise in the yen.

But not all tech stocks fell, with shares of Toshiba Corp.

jumping more than 2 percent after it lifted its half-year forecast.

Japanese stocks may no longer look like a bargain, said Toru Otsuka, deputy general manager of investment information at Mizuho Investors Securities.

''While you can say Japanese stocks have lagged behind Wall Street, in terms of (price-to-earnings ratios) Japanese stocks are no longer cheap.'' A stronger yen was also helping to dent stocks, said Hideyuki Suzuki, investment information manager at SBI Securities.

''The slightly stronger yen is another reason for investors to take profits,'' Suzuki said.

The yen was at 118.61 yen to the dollar in early Asian trade on Wednesday after falling as low as 119.88 last week.

A stronger yen is a minus for companies that make the bulk of their sales outside of Japan, as it eats into profits when earnings from abroad are brought home.

The Nikkei was down 120.28 points at 16,491.31 as of 0125 GMT.

The broader TOPIX index was down 0.90 percent at 1,623.14.

Toyota was down 1.5 percent at 6,670 yen. Its shares had risen more than 10 percent in the month to Tuesday.

Likewise, Canon Inc. fell 1.2 percent to 6,380 yen. The office equipment giant has risen more than 8 percent in the past month.

Toshiba Corp. jumped 2.4 percent to 760 yen following an upward revision in its half-year earnings forecast due to a strong performance in its power business.



Reuters