Nikkei slips as exporters fall, JAL climbs

                                
 * Nikkei slips on profit-taking after Wall Street fall
                                
 * JAL up on view that stock fell too far last week
                                
 * Trading houses lower on weak metals prices
                                
 By Elaine Lies
                                
 TOKYO, Oct 19 (Reuters) - Japan's Nikkei stock average
slipped 1.1 percent on Monday as exporters such as Honda Motor Co
<7267.T> fell after disappointing U.S. corporate earnings robbed
the market of upward momentum sparked by earlier upbeat results.
                                
 Trading houses also fell on lower prices for metals but
struggling Japan Airlines Corp <9205.T> rose nearly 9 percent
after losing 26 percent of its value last week, staging what
market players said was a rebound on a sense the stock had fallen
too far. [ID:nT305061]
                                
 The Sankei newspaper reported on Sunday that Japanese
government task force set up to keep JAL afloat has decided to
tap a state-backed institution tasked with revitalising
struggling companies. [ID:nT150928]
"Overall, global stock markets are doing well and the yen's
retreat against the dollar compared to last week's levels is
contributing to a good environment for the Nikkei," said
Noritsugu Hirakawa, a strategist at Okasan Securities.
                                
 "What we're seeing is just profit-taking, with Wall Street's
Friday fall providing the excuse, along with a sense that the
market may have risen too far, too fast."
In thin trade, the benchmark Nikkei <.N225> lost 114.73
points to 10,142.83 after hitting a three-week closing high on
Friday. During the two weeks from Oct. 5 the Nikkei rose more
than 5 percent on better-than-expected results from firms like
JPMorgan Chase & Co <JPM.N>.
                                
 The broader Topix <.TOPX> lost 0.7 percent to 894.59.
                                
 U.S. stocks fell on Friday after disappointing results from
General Electric Co <GE.N> and Bank of America Corp <BAC.N>
demonstrated the road to economic recovery will be bumpy. [.N]
                                
 Additional pressure came from a report showing that U.S.
consumer sentiment fell unexpectedly in October, tempering
optimism inspired by news of a rise in industrial production in
September and reinforcing views that the U.S. economic recovery
still faces some large hurdles. [ID:nN16384321]
"Investors are waiting for earnings results from both the
United States and Japan, and while there's no real reason to
believe these will be bad -- especially in Japan, where some
companies have been revising their forecasts upwards -- nobody
really wants to buy before then," Okasan's Hirakawa said.
                                
 EXPORTERS DOWN, JAL REBOUND
A broad range of exporters lost ground, with Kyocera Corp
<6971.T> down 1.7 percent to 7,940 yen, Advantest Corp <6857.T>
-- which makes chip testing equipment -- down 1 percent to 2,440
yen and Honda down 2.2 percent to 2,720 yen.
                                
 Sony Corp <6758.T>, which climbed on Friday after a brokerage
upgrade, lost 1.1 percent to 2,620 yen.
                                
 Trading houses such as Itochu Corp <8001.T> retreated after
metals, including copper, fell on Friday. [ID:nSP471632]. Itochu
lost 3.1 percent to 600 yen, Marubeni Corp <8002.T> lost 2.6
percent to 458 yen and Mitsubishi Corp <8058.T> lost 1.7 percent
to 1,952 yen.
                                
 JAL rose to 110 yen, though market players warned these gains
might well be temporary in the face of the company's challenges.
                                
  "There's a lot of problems such as the cost cuts that are
being demanded in areas such as pay and pensions, and since this
doesn't just affect current JAL employees but its pensioners, the
issues have deep roots and will take quite a long time to
resolve," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ
Securities.
                                
 Asahi Kasei Corp <3407.T> rose 2.2 percent to 468 yen after
the chemical and housing maker said it is likely to report
first-half operating profit 3.2 times higher than its previous
forecast, buoyed by recovery in demand for plastic materials and
cost cutting in its housing business.
                                
 But Casio Computer Co <6952.T> shares fell 7.4 percent to 704
yen after it lowered its annual outlook to an operating loss of 5
billion yen ($55 million) from its previous forecast for a 15
billion yen profit.
                                
 Casio cited a bigger-than-expected fall in sales of its
mobile phones and digital cameras.
                                
 Trade was light on the Tokyo exchange's first section, with
883 million shares changing hands, compared with last week's
morning average of 956 million.
                                
 Declining stocks outnumbered advancing ones, 960 to 560.
 (Reporting by Elaine Lies; Editing by Edwina Gibbs)