Nikkei down as trade woes, strong yen hurt; SoftBank Group extends losses

* SoftBank Group contributes hefty negative losses to Nikkei
* Some manufacturers gain after dropping sharply in May
* Casio Computer soars on share buyback announcement

By Ayai Tomisawa
TOKYO, June 4 (Reuters) - Japan's Nikkei fell on Tuesday
morning as festering trade tensions and a stronger yen hurt
sentiment while extended losses for index-heavy SoftBank Group
added to the overall pressure on the market.
The Nikkei share average .N225 dropped 0.4% to 20,325.02
at the midday break, after opening a tad higher.
Escalating trade tensions between the United States and
China have sapped investor risk appetite and rattled financial
markets in the past month. In Japan, the Nikkei has lost nearly
9% since the beginning of May.
Overnight, there was more downbeat news, with the Nasdaq
.IXIC sliding into correction mode as the index lost more than
10% from its May 3 closing record. U.S. factory activity also
disappointed, with the U.S. Institute for Supply Management's
gauge of manufacturing activity unexpectedly falling in May to
the weakest level in more than 2-1/2 years amid global trade
tensions.
"There are negative catalysts filled in the market such as
the poor U.S. ISM, the weak Nasdaq market and a rising yen,"
said Takuya Takahashi, a strategist at Daiwa Securities.
The dollar dropped to 107.885 yen JPY= overnight, its
lowest since early January, before recovering to 108.045 yen in
Asian trade.
But Takahashi said that sharp losses in manufacturers'
stocks over the past month triggered temporary short-covering.
Fanuc Corp 6954.T rose 1.3% after dropping 13% over the
past month, while Tokyo Electron 8035.T gained 1.4% after
shedding 17%.
A drop in the U.S. technology sector overnight chilled
investor sentiment, dragging down SoftBank Group Corp 9984.T
by more than 3%. The stock took a hefty negative 30 points off
from the Nikkei, with traders citing concerns about the
profitability of its tech-focused Vision Fund.
"Investors are starting to question the Vision Fund's
investment performance. They are questioning technology
companies' valuations whose sales are soaring but not the
profitability," said Makoto Kikuchi, the chief executive of
Myojo Asset Management.
SoftBank Group stock tumbled 6.2% on Monday after the Wall
Street Journal reported that the company's bid to raise a second
mega fund has met with a chilly reception from some of the
world's biggest money managers.
Casio Computer 6952.T jumped 2.3% after the company said
that it will buy back up to 5 billion yen of its own shares.
The broader Topix .TOPX shed 0.4% to 1,492.49.

(Editing by Shri Navaratnam)