* Toyota falls after Q1 loss, smaller annual loss forecast
* Fast Retailing declines after July sales fall
* Market likely pausing after rally, earnings season peaks
* Focus turns to U.S. jobs data on Wed, Fri
By Aiko Hayashi
TOKYO, Aug 5 (Reuters) - Japan's Nikkei average was almost
flat on Wednesday, with investors taking a breather after the
index set a 10-month closing high the previous day, while Toyota
Motor <7203.T> slipped after reporting a third straight quarterly
loss.
Fast Retailing <9983.T> dropped 2.5 percent after saying
same-store sales at its Uniqlo casual clothing chain in Japan
fell for the first time in nine months in July. []
"The market is confined in a very tight range after such a
big rally, though positive news like U.S. housing data continues
to come out," said Soichiro Monji, chief strategist at Daiwa SB
Investments.
"Investors now lack immediate trading factors, which have run
their course with the earnings season almost out of the way after
Toyota. It's hard to think the Nikkei could go above 10,500 for a
while."
Market players said Toyota shares faced profit-taking in the
wake of its earnings announcement and as the stock had already
gained sharply, while some said its earnings were not as positive
as the market had expected.
The benchmark Nikkei <> dipped 0.08 percent to
10,366.29, after scoring its highest close since early October on
Tuesday.
Market players say the next targets for the Nikkei will be
10,500, which is psychologically important and also a target
level for futures and options, and 10,800, a level last seen in
October.
The broader Topix <> inched down 0.1 percent to 957.88.
"Still, optimism about higher share prices going forward
remains intact and that is prompting investors to buy on dips and
supporting the market," said Fumiyuki Nakanishi, a manager at
SMBC Friend Securities.
The S&P 500 Index <.SPX> rose 0.3 percent on Tuesday after
data showing U.S. consumers spent more in June, though partly
because of rising gasoline prices, and contracts to buy used
houses rose more than expected and for a fifth-straight month.
[]
With Japan's earnings season peaking, investors will shift
their focus to economic indicators to gauge the progress of
recovery in the global economy.
The U.S. economy is expected to have lost 320,000 nonfarm
payroll jobs in July, a hefty number but still an improvement
over last month's drop of 467,000. The unemployment rate is
expected to have risen to 9.6 percent. The figures will be
released on Friday.
The ADP National Employment Report for July is due on
Wednesday.
TOYOTA FALLS
Toyota fell 1 percent to 3,990 yen after the automaker said
it slipped to its third straight quarterly loss as sales sank in
Japan, Europe and the United States, though it forecast a
slightly shallower annual loss. []
While the global downturn is hammering automakers everywhere,
Toyota's results contrasted with surprising first-quarter profits
at domestic rivals Honda Motor Co <7267.T> and Nissan Motor Co
<7201.T>. []
On Wednesday, Honda fell 0.7 percent to 3,020 yen and Nissan
declined 1.4 percent to 684 yen.
Nakanishi at SMBC Friend Securities said he thought Toyota's
earnings were fairly good.
"For a conservative company like Toyota, it was a surprise to
me that it actually lowered its loss forecast."
Shares of Fast Retailing fell to 11,510 yen after it said
same-store sales at its Uniqlo casual clothing chain in Japan
fell 4.2 percent in July, hit by unseasonably rainy weather.
Among stocks that gained, Daikyo Inc <8840.T> soared 12
percent to 178 yen after the condominium developer raised its
interim profit forecast five-fold citing unexpectedly strong
apartment sales and cost-cutting.
Some 912 million shares changed hands on the Tokyo exchange's
first section, below last week's morning average of 959 million.
Advancing stocks and declining ones were roughly even, 738 to
786.
(Editing by Michael Watson)
