Nikkei hits 1-week low on weak Wall Street; Sharp tumbles on S&P rating cut

* Investors cautious before U.S. jobs data on Fri – analysts * S&P cuts Sharp’s rating to ‘CCC+’ * Sumco dives on fund-raising announcement By Ayai Tomisawa TOKYO, March 4 (Reuters) – Japan’s Nikkei share average dropped to a one-week low on Wednesday morning after weak performances in U.S. shares triggered profit-taking, while Sharp Corp dived after Standard & Poor’s cut its credit rating.

The Nikkei dropped 1.0 percent to 18,630.97 in midmorning trade after slipping as far as 18,586.84, the lowest level since Feb. 25.

A weak-yen trend has paused, weighing on sentiment. The dollar backed off from Tuesday’s high of 120.27 yen, falling 0.1 percent to 119.62 yen.

Analysts said investors remain cautious as they look to U.S. jobs and wage data on Friday for further clues on when the Federal Reserve may raise interest rates.

“Whether this selling is short-term profit-taking or can lead to a solid correction depends on how the market perceives the U.S. jobs data,” said Isao Kubo, equity strategist at Nissay Asset Management. “If wages are better than expected and trigger worries about a sooner-than-later rate hike, there may be some more selling in stocks.” Sharp tumbled as low as 6.5 percent after S&P cut its long-term ratings on the company to ‘CCC+’ following news that it plans to ask its main lender banks for a debt-for-equity swap.

Sumco Corp dived as much as 12 percent to a 1-1/2-week low after saying it will issue up to 60 billion yen in common shares.

Exporters were weaker, with Honda Motor Co dropping 1.0 percent and Toyota Motor Corp 0.8 percent.

Bucking the weakness, NGK Insulators Ltd, world’s largest producer of insulators for power utilities, rose 3.0 percent to 2,401 yen, the highest since Jan. 30, after SMBC Nikko Securities raised its rating to “outperform” from “neutral”, citing strong business opportunities in China.

The broader Topix dropped 1.0 percent to 1,510.81, and the JPX-Nikkei Index 400 declined 1.0 percent to 13,723.12.

(Editing by Richard Borsuk)

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