* Nikkei down 1.3 pct, may snap four-day rising streak
* Automakers hit as fate of U.S. bailout plan unclear
* Exporters down on stronger yen though dollar claws back
* Resource shares provide support after oil's 10 pct surge
(Adds stocks, details)
By Elaine Lies
TOKYO, Dec 12 (Reuters) - Japan's Nikkei average fell 1.3
percent on Friday as a stronger yen hit Canon Inc <7751.T> and
other exporters, while automakers fell on worries over the fate
of the U.S. auto industry bailout plan.
Inpex <1605.T> and resource-related shares such as trading
houses climbed after oil surged more than 10 percent on Thursday,
providing some support, while broad short-covering emerged by
late morning as the dollar regained some ground against the yen.
Negotiations on a possible compromise with Senate Republicans
over the U.S. auto industry bailout continued, but Republicans
appeared to have more than enough votes to stop the bailout with
a procedural roadblock. []
Investors were hamstrung by uncertainty, with a number of
government economic proposals providing hope at the same time
that signs of a worsening global economy make buying hard.
"Right now all the economic indicators are bad, company
results are terrible, and we're in recession," said Koichi Ogawa,
chief portfolio manager at Daiwa SB Investments.
"But it does seem as if governments are in fact taking some
measures to help improve things, and there are predictions of
recovery in 2010. It's hard to buy but it's hard to sell."
Surprise negotiations on a compromise proposal for the U.S.
auto bailout moved forward and a vote appeared possible later in
the day, just hours after an agreement had appeared doomed.
Market players said that should the agreement pass, the
Nikkei could well start rising. But others warned that if it
failed, widespread selling could ensue.
Japanese stocks were hit especially hard in early trade as
the dollar appeared headed back towards a seven-week low of 91.18
yen touched on Thursday, but the dollar later clawed back to
91.67 yen <JPY=>.
"There's growing uncertainty about the U.S. economy, and on
top of this, Asian stocks appear to have been bought up perhaps a
bit too much," said Yutaka Miura, senior technical analyst at
Shinko Securities.
"Then the stronger yen is really having an impact. We have to
consider that the dollar could well fall below 90 yen."
The benchmark Nikkei <> shed 110.37 points to 8,610.18
after earlier falling more than 3 percent, and appeared set to
snap a four-day rising streak that has seen it gain 10 percent
this week.
The broader Topix <> fell 0.7 percent to 843.19.
Nikkei futures and options contracts expiring in December
likely settled at 8,427.29, Tokyo market participants said,
citing estimates by local brokerages. []
CARS, EXPORTERS, OIL
U.S. stocks fell on worries about the auto bailout and bleak
comments about the banking sector from JPMorgan's chief
executive, prompting selling of banking shares.
Additional bad news came with the release of data showing
initial claims for unemployment benefits hit a 26-year high.
Carmakers slid, though some short-covering emerged to lift
them from earlier lows.
Honda Motor Co <7267.T> fell 2.7 percent to 2,135 yen and
Toyota Motor Co <7203.T> was down 2.4 percent at 2,995 yen.
Nissan Motor Co <7201.T> slid 3.5 percent to 336 yen.
Exporters fell broadly, with Canon down 3.1 percent to 2,665
yen and Panasonic Corp <6752.T> shedding 2.5 percent to 1,050
yen. Sony Corp <6758.T> slid 2.1 percent to 1,937 yen.
But some joy came from oil-related shares after oil rose more
than 10 percent on Thursday, though it fell back a bit in Asian
trade <CLc1>.
Inpex climbed 7.8 percent to 691,000 yen, becoming the
fourth-largest contributor to the Nikkei 225 by volume weight,
while trading house Mitsui & Co <8031.T> rose 3.3 percent to 878
yen and fellow trader Mitsubishi Corp <8058.T> advanced 3.1
percent to 1,288 yen.
Elpida Memory Inc <6665.T> slid 7.9 percent to 387 yen after
it said it would redeem all or part of a recently issued $540
million convertible bond, forcing the cash-strapped PC memory
maker to look for alternative financing.
Elpida needs funds to invest in new technologies to cut unit
costs of DRAM memory chips as steep price falls are causing it to
lose money on each chip made.
On Friday, Elpida said raising funds through its Taiwan unit
would be one option. []
Trade was active, with some 1.5 billion shares changing hands
on the Tokyo Exchange's first section, compared with last week's
morning average of 791.4 million.
Declining shares outnumbered advancing shares by 920 to 648.
(Reporting by Elaine Lies; Editing by Chris Gallagher)
