* Automakers fall ahead of end of U.S. incentive plan
* Exporters slip too as yen edges up, investors take profits
* Fujitsu says sold Fanuc shares, revises up net forecast
* Views divided on Japan Aug 30 election
By Elaine Lies
TOKYO, Aug 21 (Reuters) - Japan's Nikkei average slipped on
Friday, dragged lower by Toyota Motor <7203.T> and slumping auto
shares ahead of the end of a U.S. rebate programme, with
investors nervous about moves in Chinese shares.
Exporters slipped in the wake of mixed U.S. economic data,
with a slightly stronger yen also having an impact. High-tech
exporters such as Kyocera <6971.T> were hit especially hard.
One bright spot was Japan Airlines Corp (JAL) <9205.T>,
Asia's biggest carrier by revenue, which climbed 1.2 percent
after saying it would start talks to merge its ailing air cargo
business with a unit of shipper Nippon Yusen <9101.T>.
[]
Analysts cautioned that a mixed bag of economic news, with
positive U.S. manufacturing data from the Federal Reserve Bank of
Philadelphia offsetting disappointment with the second straight
rise in weekly jobless claims, was keeping investors skittish.
"We're seeing a situation where stocks are rising in the
midst of a still tough economic situation," said Kenichi Hirano,
operating officer at Tachibana Securities.
"Stocks are likely to keep on rising, but it will be with
dips along the way, and substantial gains will take time."
The benchmark Nikkei <> fell 1.3 percent or 133.10
points to 10,250.31 after rising 1.8 percent the day before. The
broader Topix <> lost 1.2 percent to 947.22.
The Shanghai Composite Index <> opened down but soon
edged higher, gaining 0.4 percent by mid-morning.
Japanese investors are awaiting results of an Aug. 30
election amid newspaper predictions, including from the Nikkei
business daily, that the opposition Democratic Party may be
headed for a landslide victory, trouncing the conservative party
that has ruled for most of the past half-century. []
"The market consensus is that the Democrats will win, and if
they do it by a landslide this will do away with the current
political paralysis and be good for the market," said Hiroaki
Osakabe, a fund manager at Chibagin Asset Management.
But others said a Democratic win could be negative.
"They (the Democrats) want everything to be equal for
everybody. This is not something a capitalist market can like,"
said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"They say they're trying to be realistic but if they win that
many seats they'll basically have a free hand with policies."
FUJITSU UP, CARS SKID
Fujitsu Ltd <6702.T> gained 2.1 percent to 632 yen after it
said it sold most of its shares in industrial robot maker Fanuc
Ltd <6954.T> for 89 billion yen ($945 million), and it revised
its 6-month net earnings forecast to a profit from a loss.
[]
Fujitsu said it sold 11.976 million shares, most of its 5
percent stake in Fanuc, and it revised up its net earnings
forecast to a profit of 15 billion yen on the proceeds of the sale
from a previous forecast for a loss of 55 billion yen.
But automakers lost ground after the U.S. government said it
will suspend its popular "cash for clunkers" auto rebates on
Monday as the programme's $3 billion budget runs dry, a month
after it was launched. []
Toyota Motor Corp <7203.T>, the world's largest carmaker,
slid 2.7 percent to 3,990 yen, while Honda Motor Co <7267.T> shed
3.6 percent to 2,970 yen and Nissan Motor Co <7201.T> lost 4.5
percent to 682 yen.
The transport equipment subindex <.ITEQP.T> fell 2.9 percent
to become the biggest decliner among other subindexes.
"There's no question that Japanese carmakers have a
substantial exposure to the United States -- more so than, say,
automakers from Korea," said Yutaka Miura, a senior technical
analyst at Mizuho Securities.
The dollar dipped 0.3 percent to 93.88 yen, which hit
exporters. Investors fret about a stronger yen because it eats
into overseas profits when repatriated.
Canon Inc <7751.T> lost 1.1 percent to 3,500 yen and Sony
Corp <6758.T> slipped 2 percent to 2,430 yen. Kyocera <6971.T>
lost 1.1 percent to 7,310 yen.
Trade picked up slightly on the Tokyo exchange's first
section, with 1 billion shares changing hands, compared with
last week's morning average of 932 million.
Declining stocks outnumbered advancing ones by nearly 4 to
1.
(Editing by Michael Watson)
