* Carmakers lead Nikkei up on bargain-hunting after fall
* Nikon tumbles after more than doubling loss forecast
* Trade thin, eyes on Friday U.S. jobs data
By Elaine Lies
TOKYO, Aug 6 (Reuters) - Japan's Nikkei stock average rose
back towards a 10-month high on Thursday, buoyed by gains in
Honda Motor Co <7267.T> and other carmakers, but gains were
capped by U.S. data implying recovery may be more shaky than
hoped.
Nikon Corp <7731.T> tumbled nearly 12 percent after the
precision equipment and camera maker warned on Wednesday that its
operating loss would be more than double its initial estimate
this year as it wrote down the value of unsold chipmaking gear.
[]
U.S. shares lost ground on Wednesday after weak data on the
services sector and private payrolls cooled recent optimism the
recession was retreating, with the ADP private-sector jobs report
showing private employers cut 371,000 jobs last month. []
"These figures showed that while the economy is recovering,
the recovery is still a bit weaker than people were hoping," said
Hiroichi Nishi, a general manager in the equity division of Nikko
Cordial Securities.
"Japanese earnings have shown that the worst is likely
behind us, but whether sales will expand from here on in is the
big question. Attention is now turning to macroeconomic issues."
The Nikkei gained 0.9 percent or 94.83 points to 10,347.36
after earlier rising as far as 10,377.69 on bargain-hunting after
a dip on Wednesday. It hit a 10-month high of 10,479.19 on
Tuesday, when it also marked a 10-month closing high of
10.375.01.
Analysts said the Nikkei's next targets are the
psychologically important 10,500 level, followed by 10,800 and
then 12,000 -- roughly where it was when Lehman Bros collapsed
last year.
"A lot of developing stock markets have already recovered to
this level, but it's taking the majors a bit longer," said Koichi
Ogawa, chief fund manager at Daiwa SB Investments.
The Nikkei's 14-day RSI -- a measure of whether a market is
overbought -- earlier this week rose above 70, meaning it may be
overvalued and due for a pullback.
The broader Topix <> rose 0.5 percent to 954.66.
JITTERS BEFORE JOBS
The ADP report increased investor caution ahead of Friday's
keenly awaited nonfarm payrolls data. 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, while the unemployment rate is expected to have risen to
9.6 percent.
The U.S. service sector contracted in July at a faster pace
than in June, with the Institute for Supply Management's services
index falling to 46.4 last month from 47.0 in June -- below a
median forecast for a rise to 48. []
But Tokyo stocks were surprisingly resilient on what analysts
said was a combination of bargain-hunting and reassurance that
Wall Street had still managed to finish off its lows.
Nikon on Wednesday said it lowered its forecast for the
financial year to next March to an operating loss of 30 billion
yen, more than double its previous estimate for a loss of 12
billion yen.
Its shares fell 11.6 percent to 1,661 yen.
But carmakers climbed on bargain-hunting after a Wednesday
dip, with Honda up 3 percent to 3,090 yen and Toyota Motor Co
<7203.T> gaining 2.3 percent to 4,070 yen.
The transport subindex <.ITEQP.T> rose 2.5 percent, becoming
the biggest gainer among the subindexes.
The Nikkei business daily also reported that Honda, in a
cost-cutting move, plans to import Thailand-made bikes to sell in
Japan, where production costs are rising. []
Commodity-linked companies rose after copper prices hit
10-month highs on Wednesday and other base metals climbed.
Pacific Metals <5541.T>, a manufacturer of ferronickel,
climbed 6.2 percent to 820 yen, while aluminium maker Nippon
Light Metal <5701.T> jumped 5.2 percent to 102 yen.
Mitsui & Co <8031.T> extended gains, rising 2.4 percent to
1,302 yen, after Daiwa Institute of Research boosted its rating
on the share by two notches to "buy" on Wednesday.
Trade slowed on the Tokyo exchange's first section, with 879
million shares changing hands, compared with last week's morning
average of 959 million.
Advancing stocks and declining ones were almost evenly
matched, 763 to 722.
(Reporting by Elaine Lies; Editing by Joseph Radford)
