Nikkei retreats from 4-1/2-month high; Canon slumps on profit warning

* Canon weighs on precision equipment sector

* Dollar-yen top heavy at 112 limiting Nikkei's upside -traders

By Ayai Tomisawa

The Nikkei share average .N225 dropped 0.84 percent to22,090.12, after touching the highest level since early Decemberon the previous day.

Defensive drug shares dropped, with Takeda Pharmaceutical4502.T sliding 3.5 percent and Astellas Pharma4503.T falling 3.2 percent. Otsuka Holdings4578.T declined 3.5percent to three-year lows.

The Tokyo Stock Exchange's pharma index .IPHAM.T shed 3.3percent to its lowest levels in more than three months.

Canon Inc7751.T tumbled 4.0 percent after the Nikkeibusiness daily reported it is expected to cut its earningsguidance for 2019 and expects operating profit to drop 20percent to slightly above 270 billion yen, compared with thepreviously expected 325 billion yen.

A rival camera maker Olympus 7733.T shed 2.5 percent.

With the dollar dropping below 112 yenJPY= after brieflytouching a four-month peak of 112.17 on Wednesday, investors arecautious before chasing the market higher, traders said.

"Investors are taking a wait-and-see approach and some aretaking profits as it seems that the dollar-yen is top-heavy ataround 112," said Yutaka Miura, a senior technical analyst atMizuho Securities, adding that many are awaiting Japanesecorporate earnings for more cues.

Companies whose business years ended March will startreleasing their full-year results later in the month.

Automakers bucked the weakness, extending gains from the daybefore on continued optimism over U.S.-Japan trade talks.

Economy Minister Toshimitsu Motegi said the two nations havenot agreed on auto issues and declined to comment on details.

Japanese officials have said Tokyo would not accept autoexport restrictions if the U.S. makes such demands.

Toyota Motor Corp7023.T rose 0.3 percent and Honda MotorCo 7267.T jumped 1.4 percent.

Some semi-conductor shares extended their recent strength,with Keyence Corp6861.T gaining 0.8 percent to a record high.

The broader Topix .TOPX dropped 0.96 percent to 1,614.97.

Small-cap shares were hit badly, with Topix small index .TOPXS falling 1.8 percent, compared to the Topix core 30 .TOPXC , made up of the biggest 30 firms, declining 0.7percent. (Additional reporting by Hideyuki SanoEditing by Kim Coghill & Shri Navaratnam) ((; 81-3-6441-1875; ReutersMessaging:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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