Japanese Shares Fall

The Nikkei 225 average closed at 16,358.39 points on the Tokyo Stock Exchange Wednesday, down 92.19 points, or 0.56 percent. The index gained 0.1 percent on Tuesday.

The Wall Street Journal reported Wednesday that Merrill Lynch & Co. may announce third-quarter losses $2 billion more than first projected. Traders said investors were waiting to see how Wall Street reacts to the actual Merrill Lynch results due later Wednesday.

If U.S. financial stocks are dragged down, the negative impact will probably push the Nikkei below 16,000.

"While prospects remain cloudy, we are reluctant to buy financial shares," said Koji Uchida, chief fund manager at Mitsubishi UFJ Asset Management.

Mizuho Financial Group Inc. fell 1.4 percent to 612,000 yen. Shinsei Bank Ltd. dropped 6.8 percent to 331 yen.

The Wall Street Journal report also caused the yen to rise against the dollar, hitting exporters. Toyota Motor Corp. fell 2.3 percent to 6,040 yen. Sony Corp. shed 1 percent to 5,180 yen.

Brokerages were hit by a Nikkei report that Mizuho Securities Co. is expected to report a group net loss for the most recent half, with write-downs on securities held by overseas units potentially plunging the brokerage 10 billion yen (US$87 million; euro61 million) into the red.

Nomura Holdings fell 1 percent to 1,855 yen.

The broader Topix index, which includes all shares on the exchange's first section, fell 6.69 points, or 0.43 percent, to 1,563.86 points. The Topix added 0.5 percent the previous day.

In currency dealings, the U.S. dollar was trading at 114.42 yen midafternoon, down from 114.71 yen late Tuesday in New York. The euro rose to US$1.4254 from US$1.4251.