Nikkei edges down as defensives sold, Marubeni jumps

                                
 * Nikkei edges down, exporters gain as yen falls back
                                
 * Retailers slip, defensives weak
                                
 * Marubeni surges after deal with China grain body
                                
 * Eyes on U.S. bank results later this week
                                
 By Elaine Lies
                                
 TOKYO, April 13 (Reuters) - Japan's Nikkei stock average
edged down 0.1 percent on Monday as defensive shares such as
pharmaceuticals and retailers were sold, though hopes that the
worst may be over for the global economy supported sentiment.
                                
 Fast Retailing Co Ltd <9983.T> extended a tumble that began
on Friday as investors locked in profits after recent sharp
gains, with fellow retailer Seven & I Holdings <3382.T> also
slipping after last week predicting flat growth.
                                
 But Marubeni Corp <8002.T> surged 7 percent after signing a
deal with China Grain Reserves Corp's wholly owned subsidiary
that includes procuring grain for the state-run agency.
[ID:nT25493]
                                
 Sentiment is expected to continue to find support after Wells
Fargo <WFC.N> posted better-than-expected quarterly results, but
investors are reluctant to move actively ahead of U.S. bank
results later this week.
                                
 "The market rose so rapidly late last week that there is a
sense of overheating in sectors like high tech, but we're also
seeing increased signs of market energy, and this will continue,"
said Hiroichi Nishi, general manager of the equity division at
Nikko Cordial Securities.
                                
 "Fundamentally, worries about the U.S. financial system are
easing. Even though the environment still remains tough in some
ways, hopes are growing that things may start to improve."
                                
 Hopes for the economy broadened to include China after
central bank data on Saturday showed the country's banks lent a
record amount of new local currency loans, the latest sign that
the economy is gaining steam [ID:nBJD000675].
                                
 Chinese premier Wen Jiabao said on Saturday that his
country's economy has shown some positive signs, but still faces
big challenges. [ID:nSP157109]
                                
 The benchmark Nikkei <.N225> shed 6.49 points in moderate
trade to 8,957.62 after hitting a three-month closing high on
Friday and posting its fifth consecutive week of rises.
The broader Topix <.TOPX> rose 0.4 percent to 849.61.
RETAILERS RATTLED, EXPORTERS EDGE UP
                                
 Fast Retailing lost 5 percent to 10,210 yen, extending a
Friday tumble despite lifting its forecast for a second time on
strong sales of its Uniqlo casual clothing line. [ID:nT150327]
                                
 Seven & I posted strong growth in its line of convenience
stores, but this was offset by sharp falls in sales at its
department stores and supermarkets. It fell 3.8 percent to 2,135
yen.
                                
 The two retailers were the top drags on the Nikkei 225 by
volume weight. Convenience store chain Lawson Inc <2651.T> is set
to announce full-year results after the bell.
Canon Inc <7751.T> and other exporters benefitted from the
improving sentiment, with a slight additional boost coming as the
yen fell back against the dollar.
                                
 The U.S. currency gained 0.2 percent to 100.37 yen <JPY=>
Investors favour a weaker yen as a strong currency eats into
exporter profits when repatriated.
                                
 Canon rose 1.9 percent to 3,240 yen and Sony Corp <6758.T>
gained 0.4 percent to 2,595 yen.
                                
 The Nikkei business daily reported at the weekend that Toyota
Motor Corp's <7203.T> operating loss could climb to over 500
billion yen in the year, in line with a median forecast of 550
billion yen in a survey of 19 brokerages by Reuters Estimates.
[ID:nT20591]
                                
 After a brief dip, Toyota shares edged up 0.3 percent to
3,920 yen in what some analysts said was proof of how solid
sentiment was becoming.
                                
 Marubeni surged 7.1 percent to 394 yen.
                                
 Fellow trader Mitsubishi Corp <8058.T> gained 2.8 percent to
1,588 yen and Mitsui & Co <8031.T> rose 2.9 percent to 1,197 yen.
"It does seem that confidence is slowly growing among
investors that the worst may be over for the global economy, and
this will help boost commodities and other markets, helping
trading houses in turn," said Hideyuki Ishiguro, a supervisor at
the investment information section of Okasan Securities.
                                
 Among defensive shares Chugai Pharmaceutical <4519.T> lost
1.9 percent to 1,667 yen and cosmetics maker Shiseido <4911.T>
fell 1.3 percent to 1,518 yen.
                                
 Some with 1.2 billion shares changed hands on the Tokyo stock
exchange's first section, in line with last week's morning
average.
                                
 Advancing stocks outnumbered declining ones by nearly 2 to 1.
 (Reporting by Elaine Lies; Editing by Edwina Gibbs)