* Nikkei down 0.8 pct as technology shares drag
* Worry about U.S. economy deepens after Cisco loss warning
* Hopes for China support shippers, steel
(Adds stocks, details)
By Elaine Lies
TOKYO, Feb 5 (Reuters) - Japan's Nikkei stock average fell
0.8 percent as Canon Inc <7751.T> and other technology shares
slipped on worries about the U.S. economy, but hopes for Chinese
economic steps boosted shippers and steel, providing support.
Panasonic Corp <6752.T> shares rose 1.4 percent after the
world's No.1 plasma TV maker warned it would post an annual loss
of $4.2 billion, just slightly bigger than expectations, with
market players saying that some of the steps it announced -- such
as cutting 15,000 jobs -- were likely being viewed favourably.
In the United States, poor earnings from Kraft Foods <KFT.N>
and forecasts after the bell of a sharp loss for tech bellwether
Cisco Systems Inc <CSCO.O> fed worries that the recession may be
deepening even as an economic stimulus bill remains unpassed.
"Investors have no choice but to wait and see if the U.S.
stimulus bill goes through, whereas China has a lot of
infrastructure projects to be taken care of and a lot of money,"
said Katsuhiko Kodama, senior strategist at Toyo Securities.
"I think it's safe to say China's economy won't fall that
much. There's a bit of light here."
Though investors are eyeing movements in currency markets,
the dollar was only slightly weaker against the yen at 89.35 yen
<JPY=> ahead of interest rate decisions by the European Central
Bank and Bank of England later on Thursday.
Though the market is also marking time ahead of U.S. jobs
data due out on Friday, a report by ADP Employer Services
released on Wednesday showed U.S. private sector job losses
slowed slightly in January, with 522,000 jobs cut against
expectations of a loss of 530,000.
"Since this came in better than expected, interest in the
jobs data has heightened, with some speculating it may not be so
bad either and reducing the possible impact as a factor," said
Noritsugu Hirakawa, a strategist at Okasan Securities.
The benchmark Nikkei <> lost 66.88 points to 7,972.06
while the broader Topix <> fell 0.1 percent to 791.82.
"The selling today's just moderate, no kind of panic selling,
and given the rise in China-connected shares, market direction
could change," Hirakawa added.
CHINA CHARM
The Chinese government has already pledged 4 trillion yuan
($585 billion) over the next two years to help boost domestic
demand. Work on projects including rebuilding the earthquake-hit
southwest and improving road and rail links is under way.
Premier Wen Jiabao has said more may be needed. []
China's main stock market rose 0.6 percent, extending its
gains for the week to some 6.6 percent <>.
Shipping firms surged after the key Baltic Dry freight index
<.BADI> soared nearly 15 percent, which some market players
attributed to growth in demand from China or hopes this will soon
result, with Mitsui O.S.K. Lines <9104.T> climbing 6.9 percent to
649 yen.
Kawasaki Kisen <9107.T> soared 9.8 percent to 403 yen and
Nippon Yusen <9101.T>, Japan's biggest shipping firm, climbed 6.6
percent to 502 yen.
China hopes buoyed steel firms as well, with JFE Holdings
<5411.T> up 4.2 percent at 2,610 yen and Nippon Steel <5401.T> up
2.5 percent at 287 yen.
But technology firms fell, weighted after Cisco Systems
forecast a slide in revenue of as much as 20 percent in the
current quarter, sending its shares down 4 percent after the
bell.
Kyocera Corp <6971.T> fell 1.8 percent to 6,070 yen, while
Canon lost 2.8 percent to 2,450 yen. Tokyo Electron <8035.T> fell
1.5 percent to 3,410 yen.
Drug firms also dragged on the market after Chugai
Pharmaceutical Co <4519.T> fell 2.9 percent to 1,603 yen after
Nikko Citigroup cut its rating on the drugmaker to "Sell/Medium
Risk" from "Hold/Medium Risk" and lowered its target price to
1,600 yen from 1,700 yen, citing an increase in research and
development costs.
Takeda Pharmaceutical <4502.T>, Japan's largest drugmaker,
lost 3.4 percent to 4,030 yen and Astellas Pharma Inc <4503.T>
lost 2.3 percent to 3,380 yen.
Trade was active on the Tokyo Exchange's first section with 1
billion shares changing hands, compared with last week's morning
average of 861 million.
Advancers and decliners were evenly matched, 764 to 775.
(Editing by Brent Kininmont)
