* Concerns about virus outbreak keep sentiment cautious
* Earnings from Toray, Nikon disappoint
* Honda bucks trend with profit outlook upgrade
By Hideyuki Sano
TOKYO, Feb 10 (Reuters) - Japanese shares slipped on Monday
as fears about the severity of the coronavirus outbreak in China
and weak earning results outweighed any boost from strong U.S.
employment data.
The Nikkei share average .N225 fell 0.6% to 23,685.98
points, slipping for two trading days in a row after hitting a
two-week high on Thursday. The broader Topix .TOPX lost 0.72%
to 1,719.64.
The death toll from the coronavirus rose over the weekend,
passing the total killed by the SARS epidemic. In mainland
China, the toll has topped 900 with total infections reaching
40,000.
"We can't see signs that the epidemic is easing as yet. The
damage to supply chains is also not clear," said Nobuhiko
Kuramochi, chief strategist at Mizuho Securities.
"We need to see whether the epidemic will peak out this
month or it could take a bit longer."
Worries about the disease dampened any boost from strong
U.S. jobs report on Friday. Non-farm payrolls increased 225,000
in January, far above expectations of 160,000. Shippers .ISHIP.T were the worst performing sector,
falling 1.8%.
Earning results from some Japanese firms also highlighted
tough business conditions.
Toray Industries 3402.T fell 2.3% after the manufacturer
of fibres and plastics cut its annual profit outlook, citing
softening demand of products for cars and smartphones.
Camera maker Nikon 7731.T dropped 5.8% to hit a decade low
following its weak earnings due to shrinking demand for digital
cameras.
Nippon Steel 5401.T fell 0.6% after the steelmaker booked
a record loss of 440 billion yen ($4 billion) this financial
year as it announced closing three blast furnaces to deal with
waning domestic demand. While the losses were bigger than expected, some market
players saw the restructuring efforts as a long-term positive.
According to SMBC Nikko Securities, profits from Japanese
firms that have reported quarterly earnings so far are down 3.8%
from a year earlier, with manufacturers hit particularly hard.
Rakuten 4755.T dropped 1.5% as Japanese antitrust
officials raided the offices of the e-commerce company after
complaints from online merchants about the company's free
shipping policies. Meanwhile, Honda Motor 7267.T gained 2.9% after Japan's
third-biggest carmaker raised its forecast for full-year
operating profit by 6% on Friday due to a weaker yen.
Its top executive said the company has not suffered from
major supply chain disruptions in coronavirus-hit China.
Leopalace21 8848.T jumped 15% after the scandal-tainted
apartment builder reported a recovery in occupancy.
Trading was subdued ahead of a Japanese market holiday on
Tuesday.