Japan shares down 0.98 per cent by noon

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The Nikkei index at the Tokyo Stock Exchange fell 94.32 points to 9,577.64 by noon. The Topix index of all first section shares declined 0.70 per cent or 5.89 points to 834.79.

Exporters fell on a stronger yen and major automakers have been hit by a sharp dip in March domestic production, said Hisatsune Kobayashi, general manager of global investment strategy at SMBC Nikko Securities.

Toyota tumbled 1.83 per cent to 3,215 yen, Honda fell 1.61 per cent to 3,055, and Nissan dropped 0.39 per cent to 756.

The automakers said Monday that domestic production plummeted last month after the massive quake and tsunami of March 11, which shut off parts supplies and led to widespread power shortages.

Ratings agency Standard & Poor's revised from "stable" to "negative" its outlook for the trio.

The dollar fetched 81.82 yen Tuesday morning against 82.23 yen in Tokyo Monday.

Investor sentiment was also dampened after the videogame giant Nintendo said Monday its full-year net profit plunged 66.1 per cent on a strong yen and a global sales slump, brokers said.

Nintendo dropped 3.98 per cent to 19,520 by the lunch break.

"A drop in sales to some extent was expected, but investors were further disappointed by the lack of share reaction to the announcement of a new game console," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

Nintendo said Monday it would introduce a home console in 2012 to succeed its Wii videogame system.

Nintendo shares often receive a boost from news of a new console, but Akino said investors no longer reacted positively due to the intense competition Nintendo faces from new rivals.