Nikkei slides 4.1 pct on yen, Sony and Canon tumble

TOKYO, Jan 13 - Japan's Nikkei average slid 4.1 percent on Tuesday with Sony Corp tumbling on news of an operating loss and camera maker Canon Inc dropping after its chairman said year-end holiday sales were disappointing.

Other exporters were also hit by a stronger yen and a fall on Wall Street.

"The focus is now on the deterioration of fundamentals both in Japan and the United States after hopes for the new U.S. administration boosted the Nikkei to above 9,000," said Yutaka Miura, a senior technical analyst at Shinko Securities.

"But the Sony report is not the only factor dampening the market mood as downward revisions are seen as inevitable these days."

Sony shares was 8.4 percent lower at 2,010 yen after a source said the firm was expected to post an operating loss of about 100 billion yen ($1.1 billion) for 2008/09, far short of the company forecast for a profit of 200 billion yen.

The loss had first been flagged by the Nikkei business daily.

The benchmark Nikkei lost 365.66 points to 8,471.14, after it slipped 0.5 percent on Friday and booked its first weekly decline in a month.

The broader Topix shed 4 percent to 820.63.

The Dow Jones industrial average fell 1.5 percent on Monday amid concerns about the earnings season, while the dollar fell 1.3 percent to 89.10 yen, just above a three-week low and near December's 13-1/2-year trough just above 87 yen.

Investors fret over a stronger yen as it eats into exporters' overseas profits when repatriated.

Canon lost 6.4 percent to 2,930 yen after the chairman of the world's largest digital camera maker said its year-end holiday sales were "disappointing" and he expected a difficult 2009 as an economic downturn hits consumer demand.

Automakers also fell, with Toyota Motor Corp skidding 5.5 percent to 2,900 yen.

Nippon Steel Corp, the world's second-biggest steel maker, declined 4.6 percent to 292 yen after its chairman said on Sunday it is likely to reduce output further as it struggles with weak demand and pressure for price cuts from battered automakers.