* Nikkei slips on profit-taking after bounce on Thursday
* Nerves before U.S. jobs data weigh on market, trade thin
* Konica Minolta tumbles after earnings, Pioneer falls
By Elaine Lies
TOKYO, Aug 7 (Reuters) - Japan's Nikkei stock average edged
down on Friday as investors, nervous ahead of crucial U.S. jobs
data, locked in profits, with Honda Motor Co <7267.T> and other
carmakers down after climbing the day before.
Konica Minolta Holdings <4902.T> tumbled nearly 10 percent
after Nomura Securities cut its rating to "neutral" from "buy"
and lowered its target price to 970 yen from 1,200 yen,
following the company's earnings announcement on Thursday.
Wall Street slipped as investors turned cautious a day
before the July employment data and took profits in the wake of
recent strong gains, and market analysts said spillover from this
was prompting sales of Japanese shares as well.
"Nobody knows what the jobs data will do to the market. The
U.S. market basically stalled ahead of this," said Masayoshi
Okamoto, head of dealing at Jujiya Securities.
"We're certainly not heading into a downtrend, but we've
been gaining for five months now mainly on expectations that
company results will improve and it's hard to know if we can
maintain this momentum into the rest of the year. Rises will be
tough."
Other analysts noted that Japanese investors were jittery
ahead of the weekend and next week, when business slows and many
people take summer vacations.
In thin trade, the benchmark Nikkei <> shed 1 percent
or 104.54 points to 10,283.55 after hitting a 10-month closing
high of 10,388.09 on Thursday. The broader Topix <> lost
1.2 percent to 946.09.
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.
Analysts said that while expectations are not as high as
they were last month, when the figures were an unhappy surprise
that sent markets tumbling, some weak U.S. economic data this
week has cooled investor optimism about the speed of economic
recovery.
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. []
"Part of the problem with last month's jobs data was that
people were expecting too much, but I think this time they're a
bit more realistic," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.
"Even if the figures aren't that good, the market's prepared
to an extent. Once the data's out we can move on."
CARS RETREAT
The Nikkei is likely to drift in a narrow range around
10,300 for the next few weeks, with attention shifting to
macroeconomic indicators and Japan's August 30 election, but
longer range targets remain the psychologically important 10,500
and then 10,800 -- the Nikkei's level last October.
Carmakers and related firms lost ground on Friday after
Thursday's bounce, when they rose on hopes the U.S. "cash for
clunkers" sales incentive would be extended.
The U.S. Senate approved a $2 billion extension of the
programme during morning trading in Tokyo, with U.S. President
Barack Obama expected to sign it quickly. [ID:nN06362591}
"This will support carmakers over the longer term by helping
sales in August and September perk up, with stronger carmakers
helping keep the Nikkei steady," said Fujio Ando, senior
managing director at Chibagin Asset Management.
Honda fell 2.6 percent to 3,030 yen and Toyota Motor
<7203.T> lost 2.9 percent, to 4,010 yen. Tyre maker Bridgestone
Corp <5108.T>, which announces earnings on Friday, shed 2.4
percent.
Otherwise, activity centred on earnings, with investors
dumping shares of companies that fared poorly.
For the three months to June, Konica Minolta recorded an
operating loss of 589 million yen, compared with a 24.5 billion
yen profit a year earlier. It fell 9.8 percent to 894 yen.
"Results for 10/3 (the year to March 2010) Q1 revealed a
much greater downturn for color copies than we had previously
anticipated," Nomura's Japanese equity research analyst wrote in
a client note.
Kubota Corp <6326.T> sank 6.9 percent to 759 yen after the
machinery maker reported a 70 percent drop in quarterly
operating profit, citing slow demand for farm equipment and a
stronger yen.
Trade slowed on the Tokyo exchange's first section, with 843
million shares changing hands, below last week's morning average
of 959 million.
Declining stocks outnumbered advancing ones by 4 to 1.
(Reporting by Elaine Lies; Editing by Joseph Radford)
