Nikkei flat as yen weighs, shrugs off machine orders

                                
 * Nikkei pressured as yen rises against dollar
                                
 * Machinery orders "positive surprise" but little impact
                                
 By Elaine Lies
                                
 TOKYO, Nov 11 (Reuters) - Japan's Nikkei stock average was
flat on Wednesday as the yen climbed, offsetting a surprisingly
large jump in domestic machinery orders for September and a
forecast for a rise in the fourth quarter.
                                
 Tech shares such as Advantest Corp <6857.T> slipped after
rising the previous day, while nonferrous metals makers such as
Dowa Holdings <5714.T> came under pressure amid concerns over
long-term demand.
But Japan Airlines Corp <9205.T> rose 4.8 percent after
sources said the state-owned Development Bank of Japan will offer
a 100 billion yen ($1.1 billion) line of credit to JAL to keep
the airline from running out of cash. [ID:nBNG509104]
                                
 The dollar lost 0.4 percent to 89.37 yen and analysts said
the stronger yen was providing some immediate pressure, although
they noted that the bigger problem was one of demand.
                                
 "Japanese investors basically lack confidence. There's worry
about financing issues, and the market's lacking catalysts now
that the earnings season is mostly over," said Koichi Ogawa,
chief fund manager at Daiwa SB Investment.
                                
 "Longer-term, there's the whole issue of the Japanese budget
deficit."
                                
 Core machinery orders, a highly volatile series regarded as
an indicator of capital spending, surged 10.5 percent in
September and manufacturers forecast a rise of 1.0 percent in
October-December, the first quarterly increase in seven quarters.
[JPMORD=ECI]
                                
 Though some machinery makers rose, gains were limited and
analysts remained wary.
                                
 "Machinery orders may be bottoming out, but this does not
mean that this 1.0 percent will now grow to 3.0 percent and then
to 10 percent," said Junko Nishioka, chief economist at RBS
Securities.
                                
 "Companies are still suffering from excess capacity, and the
strong yen and a slow recovery in U.S. demand are still dragging
on overall corporate activity.
                                
 The benchmark Nikkei <.N225> was flat at 9,870.65, while the
broader Topix <.TOPX> index rose 0.1 percent to 873.39.
                                
  Buoyed by the machinery orders, Sumitomo Heavy Industries
<6302.T> rose 3.9 percent to 432 yen and Daikin Industries
<6367.T> climbed 3.5 percent to 3,280 yen. Industrial robot maker
Fanuc <6954.T> edged up 0.3 percent to 7,640 yen.
                                
 Dentsu <4324.T> rose 1.6 percent to 1,911 yen after Morgan
Stanley lifted the advertising company's rating to "equal-weight"
from "underweight and its target price to 1,800 yen from 1,350
yen.
                                
 But Aeon Co Ltd <8267.T>, Japan's second-largest retailer,
fell 4.9 percent to 737 yen after saying it would raise 100
billion yen ($1.11 billion) through a convertible bond issue to
service debt payments, triggering worries over a dilution in
share value.
                                
 The Dow industrials <.DJI> eked out a new 13-month high,
though the Nasdaq <.IXIC> and S&P 500 <.SPX> edged lower, after
cautious statements on the economic outlook by several Fed
officials underscored the belief that an easy monetary policy
will remain intact well into next year. [ID:nN10315173]
 (Reporting by Elaine Lies; Editing by Edwina Gibbs)