* Nikkei pares falls; support holds above 9,000
* Stable dlr/yen after news of PM, BOJ chief meet helps
* Next downside target seen at 8,697, 61.8 pct retracement
By Aiko Hayashi and Elaine Lies
TOKYO, Aug 17 (Reuters) - Japan's Nikkei fell 0.5 percent on
Tuesday, drawing close to a 13-month low hit last week, with the
yen holding onto gains against the dollar as mounting signs of
weak economic growth dampened appetite for risk.
But the Nikkei pared earlier losses after a government source
told Reuters that Japanese Prime Minister Naoto Kan and Bank of
Japan Governor Masaaki Shirakawa are likely to meet next Monday,
sending dollar/yen slightly higher. []
In thin trade, the benchmark Nikkei's <> downward move
came to a halt below 9,100 for the third time in four trading
days, buoyed for now by short-covering. But market players said
further moves depended on the yen's performance and that the
9,000 level, which has held since May 2009, could well prove
vulnerable soon.
"Stabilising moves in dollar/yen and a sense of relief after
selling didn't pick up further after the Nikkei dipped below
9,100 sparked some short-covering," said Masayuki Otani, chief
market analyst at Securities Japan, Inc.
"But that's not the end of the story. More economic data are
coming out of the United States this week and the currency market
will likely move accordingly. The Nikkei could break below 9,000
depending on the external environment and if it does, dumping of
stocks will pick up further momentum."
The benchmark Nikkei <> was down 47.67 points at
9,149.00 after falling as far as 9,084.24, within sight of a
13-month low of 9,065.94 hit last week. The broader Topix <>
fell 0.4 percent to 825.55.
Whether the Nikkei can stay above 9,000 or not is a big focus
this week, market players say, with the Nikkei's next support
lying at 8,697, a 61.8 percent retracement of the rally between
the March 2009 low and the April 2010 high.
Little impact was seen for now from media reports that the
government has started to consider additional steps to support
the economy, market players said, since a concrete decision is
unlikely to come anytime soon. []
Data released on Monday showed that Japan's economic growth
slowed sharply in the April-June quarter, with tepid U.S. data
later in the day adding to the pessimistic mood.
"It's starting to seem as if it'll be hard for the market to
stop falling unless the government and Bank of Japan do something
to halt the yen's rise -- not intervention, because that wouldn't
be too effective, but perhaps some new financial easing," said
Toshiyuki Kanayama, a market analyst at Monex Inc.
The dollar was steady at 85.32 yen <JPY=>, after hitting
85.11 yen in early Asian trade, within sight of a 15-year low of
84.72 yen reached last week. []
U.S. stocks ended mostly flat after home builders' optimism
hit a nearly 1-
