*Nikkei slides as investors take profits after sharp rise
*Blue-chip exporters hold firm, banks brake slide
*Inflation data sparks concern, but not too much
(Adds stocks, details)
By Elaine Lies
TOKYO, Aug 12 (Reuters) - Japan's Nikkei stock average
slipped 0.7 percent on Tuesday as investors locked in profits
after Monday's three-week closing high, with Tokyo Electron Ltd
<8035.T> and other firms that had risen hit by selling.
But Honda Motor Co <7267.T> and other blue-chip exporters
held firm, while gains by large banks braked further slides and
oil's fall below $113 yen on Monday helped boost shippers and
Japan Airlines Corp <9205.T>
Japanese annual wholesale price inflation jumped to 7.1
percent in July, a 27-year high and well above expectations,
adding to fears that high energy and commodity costs are
squeezing firms and pushing the economy into recession.
[]
Market players were divided in their take on the data, which
came out just prior to the open, with some shrugging it off while
others said a negative impact was unavoidable, albeit limited.
"This shows that inflation is a bit higher than expected, and
raises fears about possible pressure on company earnings," said
Takashi Ushio, head of the investment strategy division at
Marusan Securities.
"But all of these price rises haven't yet been passed to
consumers and it may already be factored in anyway."
The soaring wholesale inflation comes as worries grow that
Japan's longest post-war recovery may have ended as exports --
the main engine of growth in the world's No.2 economy -- sputter
as the global economy slows.
Trade was thin ahead of Japanese gross domestic product data
due out on Wednesday, but Ushio said negative figures for this
had been priced in as well.
But others disagreed.
"Concerns about GDP is definitely keeping investors from
active buying. It's just not something they want to do right
now," said Noritsugu Hirakawa, a strategist at Okasan Securities.
Economists polled by Reuters expect the figures -- due out at
8:50 a.m. on Wednesday (2350 GMT) -- to show Japan's economy
contracted 0.6 percent in the second quarter.
The benchmark Nikkei <> had shed 95.04 points to
13,335.87 by midday, edging close to what market players said was
its support line at 13,300.
The broader Topix <> was down 0.2 percent at 1,277.66.
PROFIT-TAKING PRESSURES
Chip-related firms Tokyo Electron and Kyocera Corp <6971.T>
were both hit by profit-taking after powering higher on Monday,
becoming among the top drags on the Nikkei by volume weight.
Tokyo Electron lost 2.9 percent to 6,410 yen and Kyocera shed
1.3 percent to 9,620 yen.
Trading firms dropped in the wake of oil's slide, with Mitsui
& Co <8031.T> down 2.6 percent at 1,848 yen and Itochu Corp
<8001.T> down 0.3 percent at 913 yen.
But losses were braked by gains in large banks, with top
lender Mitsubishi UFJ Financial Group <8306.T> up 1.8 percent at
892 yen and No. 2 bank Mizuho Financial Group <8411.T> up 2.1
percent at 488,000 yen.
Tokio Marine Holdings Inc <8766.T> climbed 3.3 percent to
3,740 yen after the insurer said it would buy back up to 50
billion yen ($454 million) worth of its own shares, or 2.2
percent of outstanding shares, between Aug. 12 and Nov. 18.
Oil's slide helped bolster a wide range of shares, with Japan
Airlines up 3.2 percent at 225 yen and Mitsui O.S.K. Lines Ltd
<9104.T> up 2 percent at 1,234 yen. Fellow shipper Kawasaki Kisen
Kaisha Ltd <9107.T> rose 1.7 percent to 731 yen.
Honda Motor rose 2.2 percent to 3,710 yen and Canon Inc
<7751.T> rose 0.4 percent to 5,320 yen.
Trade was light on the Tokyo exchange's first section, with
964 million shares changing hands, compared with last week's
morning average of 1 billion.
Declining stocks outpaced advancing ones by a ratio of more
than 2 to 1.
(Reporting by Elaine Lies; Editing by Chris Gallagher)
