Nikkei drops, led by chip stocks, machine tool makers; Kubota falls

* Kubota's volume 370 pct of 30-day moving average

* Chip-related stocks tumbled after Sox index fall overnight

* Pioneer volatile after funding news

By Ayai Tomisawa

TOKYO, Sept 12 (Reuters) - Japan's Nikkei fell on Wednesday as chip-related stocks tracked weakness in their U.S. counterparts overnight and as machine tool makers weakened after downbeat industry data.

In afternoon trade, agriculture equipment maker Kubota Corp tumbled as much as 4.9 percent after ending 1.4 percent lower after the company said it had falsified data for metal rolling components. The company said that the products were shipped to 85 steelmakers in Japan and abroad, but it added that there had been no impact on the quality of the components.

A total of 10.46 million of Kubota shares changed hands, about 370.1 percent of their 30-day moving average of 2.83 million shares a day.

The Nikkei share average ended 0.3 percent lower at 22,604.61, after rising 1.3 percent to a one-week high on Tuesday.

Worries about escalation in the Sino-U.S. trade war and the outcome of U.S.-Japan trade talks also added to the gloomy mood.

"There is so much uncertainty over global trade issues. We want to first know how Japan's key auto industry will be affected," said Kazuhito Suzuki, a strategist at Shinkin Asset Management.

A source told Reuters on Wednesday that Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer will likely hold a second round of trade talks on Sept. 21 in the United States.

Their meeting is planned to precede an expected summit between Prime Minister Shinzo Abe and President Donald Trump on the sidelines of a U.N. General Assembly General Debate starting Sept. 25, the source said.

Chip-related stocks were under pressure after the Philadelphia SE Semiconductor Index dropped 1 percent overnight.

Semiconductor device maker Rohm Co dived 10.5 percent to hit a one-year low, while high-purity silicon maker Sumco Corp stumbled 7.8 percent and Advantest Corp dropped 3.7 percent.

Machine tool makers stumbled after the Japan Machine Tool Builders' Association said orders for overseas markets in August dropped 4.4 percent on the year.

Tsugami Corp dived 6.3 percent, Okuma Corp plunged 4.9 percent, DMG Mori dropped 2.2 percent and Makino Milling Machine shed 2.0 percent.

Struggling consumer electronics maker Pioneer Corp was extremely volatile, soaring as much as 6.2 percent before ending the day down 9.3 percent.

Pioneer said it had secured up to 60 billion yen ($540 million) in funding from Hong Kong-based fund manager Baring Private Equity Asia (BPEA).

"Pioneer's life was extended through the funding for now, but it's unclear how the company's is trying to survive and which profitable core business it has," said a fund manager at a Japanese asset management firm.

The broader Topix shed 0.7 percent to 1,686.64. (Reporting by Ayai Tomisawa; Editing by Simon Cameron-Moore)

2018-09-12 08:47:25

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