Nikkei stumbles to near one-month low after U.S. data disappoints

By Ayai Tomisawa

TOKYO (Reuters) - Japan's Nikkei share average stumbled to a near one-month low on Monday morning as the dollar fell sharply against the yen on disappointing U.S. jobs data, weighing on exporter stocks.

The Nikkei dropped 1.4 percent to 16,404.93 in mid-morning trade, after falling to as low as 16,322.64, the weakest level since May 10.

U.S. nonfarm payrolls rose by just 38,000 last month, the smallest increase since September 2010 and well shy of expectations for a rise of 164,000. All 105 economists polled by Reuters had forecast higher numbers.

"When I first saw that figure, I wondered if it was 138,000, and I later figured that I was adding an extra digit in my head. It was that shocking," said Takuya Takahashi, an equity strategist at Daiwa Securities.

He said that the market is bracing for a further fall leading up to comments from Federal Chair Janet Yellen, who is due to speak on the economic outlook and monetary policy to the World Affairs Council of Philadelphia later in the day.

"If she hints at a possibility of an interest rates hike next month, if not this month, the dollar may not fall further, and the impact to the stock market can be limited," he said.

Exporters languished, with Toyota Motor Corp falling 1.5 percent, Honda Motor Co declining 2.7 percent and Panasonic Corp skidding 2.6 percent after the dollar slid to a one-month low of 106.35.

Banks and insurers underperformed with Mitsubishi UFJ Financial Group down 2.8 percent, Sumitomo Mitsui Financial Group shedding 2.6 percent, and Dai-ichi Life Insurance Co tumbling 4.2 percent.

The securities sector was the worst performer on the board. It dived more than 3.5 percent to a near four-month low on thin volume and turnover. Nomura Holdings tumbled 3.3 percent and Daiwa Securities Group nosedived 4.2 percent.

SoftBank Group Corp, on the other hand, outperformed the market and rose 0.7 percent after saying that it was selling a further $1.1 billion of its shares in Alibaba Group Holding Ltd, bringing the total it has sold in the Chinese e-commerce company to $10 billion.

The broader Topix shed 1.3 percent to 1,319.29 and the JPX-Nikkei Index 400 declined 1.4 percent to 11,881.33.

(Editing by Sam Holmes)