* Some exporters pressured after yen hits 8-wk high vs
* Mizuho drops after admitting officials knew of crime loans
By Ayai Tomisawa
TOKYO, Oct 9 (Reuters) - Japan's Nikkei share average erased
early losses on Wednesday, moving away from a five-week low, but
the mood stayed cautious as a lack of progress in resolving the
U.S. budget standoff weighed on investor confidence.
The Nikkei was up 0.2 percent at 13,918.49 in
mid-morning trade. Earlier on Wednesday, it fell as far as
13,751.85, just above a five-week low of 13,748.94 hit on
The broader Topix gained 0.4 percent to 1,154.76.
U.S. President Barack Obama on Tuesday refused to give
ground in a fiscal confrontation with Republicans, saying he
would negotiate on budget issues only after they agree to
re-open the federal government and raise the debt limit with no
But early on Wednesday, U.S. stock futures rebounded from a
one-month low on news that Obama will nominate Federal Reserve
Vice Chairwoman Janet Yellen, seen as a proponent of dovish
policy, as the next head of the Fed.
"Sentiment is mixed with pessimism and optimism," said
Hikaru Sato, a senior technical analyst at Daiwa Securities.
"Investors are cautious for sure, but they do not want to reduce
their holdings too much because it is possible to see a 2-3
percent spike in the index as soon as progress is made."
Sato said the Nikkei may stay below the 14,000-mark for the
time being but may not fall sharply from its current level this
Some exporters lost ground after the yen hit an eight-week
high of 96.55 to the dollar on Tuesday. A stronger yen erodes
exporters' overseas earnings when repatriated and hurts their
Sony Corp dropped 1.8 percent.
Mizuho Financial Group fell 1.5 percent and was the
second most traded stock by turnover after the bank's officials
admitted top management knew at least three years ago about
loans to criminal groups.
In a report published on Tuesday, Credit Suisse cut its
overweight position on Japan stocks to 7 percent from 16 percent
because of such factors as weak momentum in the Japanese market
and a lack of details in the government's growth strategy
announced early this month.
But it remains overweight due to factors including its view
that the Bank of Japan will step up its quantitative easing in
the first quarter of 2014 if inflation does not meet the BOJ's
forecast. Such a move could weaken the yen to 115 yen to the
dollar, the brokerage said.
The Nikkei is up 33 percent this year, but is still down 13
percent from its May peak.