Japan stocks fall on yen, pre-election caution

TOKYO -- Japanese stocks cooled off Tuesday, as exporters fell on a stronger yen and investors sold to take profits ahead of this weekend's parliamentary elections.

The benchmark Nikkei 225 stock average fell 83.69 points, or 0.8 percent, to 10,497.36 after soaring 3.4 percent on Monday. The broader Topix index declined 0.5 percent to 965.11.Analysts and recent polls predict that Japan's ruling party will lose its long-running grip on power in lower house elections Sunday. Japan's finance minister - and a senior party member - echoed the political realities facing the Liberal Democrats.

"A huge wave of the (opposition Democratic Party of Japan) is sweeping over Tokyo," Kaoru Yosano said Tuesday. "It looks like they could control the parliament under a one-party dictatorship."

Sentiment also waned on sharp declines in China, where the country's main index sank 2.6 percent as players turned cautious after recent gains and looked for more signs of economic recovery.The dollar slipped into the upper 93-yen territory at one point Tuesday, sending exporters including electronics makers lower. Exporters frown at a climbing yen because it makes their products more expensive in overseas markets and reduces the value of overseas profits when repatriated to Japan. link....