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Tokyo Ѕhаres Еnd Lower As Spaіn Concerns Weigh

Tokyo stocks fell Tuesday amid widespread risk aversion, with the benchmark index declining to a six-week low as concerns over Spain’s debt problems pushed down major exporters like Canon and Honda Motor.

After treading above and below break-even during the day, the Nikkei Stock Average closed down 20.23 points, or 0.2%, to 8488.09, the lowest since June 8. On Monday the index fell 1.9%.

The Topix index of all the Tokyo Stock Exchange First Section issues declined 2.95 points, or 0.4%, to 717.67, with 24 of 33 subindexes ending in negative territory.

Trading volume was subdued at 1.6 billion shares.

The Nikkei opened lower, as Spain’s rising borrowing costs reignite concerns about the euro-zone sovereign debt crisis. The selling wasn’t too aggressive, though, as Japanese stocks still look relatively undervalued following recent sharp falls, analysts said.

“What’s weighing on global markets the most is Europe,” said Hideyuki Ishiguro, a supervisor at investment strategy firm Okasan Securities. “Japan’s corporate earnings results, even if strong, are unlikely to affect (equity markets) much.”

Canon dropped 1.5% to Y2,702, while Honda Motor lost 0.9% to Y2,418.

Participants will likely focus on the meeting between Spanish and German finance ministers in Berlin later in the day, said Kenichi Hirano, market analyst at Tachibana Securities. “The broader framework of leaders working together to deal with the crisis is unlikely to change,” he said.

Meanwhile, data released during the day showed that China’s preliminary HSBC China Manufacturing Purchasing Managers Index rose to 49.5 in July compared with a final reading of 48.2 in June.

The result boosted some Japanese China-related stocks, with Komatsu rising 1.0% to Y1,671 and Hitachi Construction Machinery gaining 1.2% to Y1,314.

“Various indicators suggest there will be no hard landing (in China), but there are gaps among regions and the data is mixed,” said Yoshihiro Okumura, general manager of research at Chibagin Asset Management. “It will take some time until a direction becomes clear.”

Among single-name movers, Sharp lost 1.7% to Y289 following a Nikkei report that the firm is expected to report a group net loss of roughly Y100 billion for the April-June quarter as its LCD panel and solar panel businesses continued to deteriorate.

“Although Sharp is trying to help improve its business through a tie-up with Hon Hai Precision Industry, the company’s business situation remains tough on sluggish demand amid the global economic slowdown,” said Monex Inc. senior market analyst Toshiyuki Kanayama.

Toshiba dropped 5.4% to Y261 amid concerns over its revenue outlook after the firm said Tuesday it will cut production of NAND flash memory chips by 30% at its Yokkaichi plant in Japan starting immediately.

Meanwhile, Suzuki Motor gained 1.8% to Y1,390, rebounding after recent falls. A senior employee was killed last week during a riot at its Indian subsidiary’s Manesar factory in northern India, leading to a lockout at the plant.

September Nikkei 225 futures closed down 40 points, or 0.5%, at 8470 on the Osaka Securities Exchange.