* Mitsubishi Motors sinks after rules out Peugeot capital tie
* Elpida gains, to buy Spansion flash memory assets
* Trade cautious on Greece's fate, before U.S. data - analyst
By Aiko Hayashi
TOKYO, March 4 (Reuters) - Japan's Nikkei average fell 0.7
percent on Thursday, with exporters hurt by worries about a
stronger yen, while Mitsubishi Motors <7211.T> dropped after it
and France's PSA Peugeot Citroen <PEUP.PA> failed to agree on
terms for a capital alliance.
Trade was cautious as investors remained wary ahead of
Friday's U.S. jobs data and waited to see how Greece's debt woes
will ultimately play out, though encouraging U.S. economic data
and hopes for progress on Greece's problems provided support.
"It's not as if investors' sentiment has soured, but it's
just that they still can't be bullish enough about the economy to
keep pushing up the market," said Kazuhiro Takahashi, general
manager at Daiwa Securities Capital Markets.
"Falls in other markets such as Hong Kong are weighing on the
Nikkei in the afternoon, but the market here is still basically
stuck in a narrow trading range."
The benchmark Nikkei <> was down 73.45 points at
10,179.69 in midafternoon after seesawing between positive and
negative territory. The broader Topix <> declined 0.6
percent to 900.25.
The dollar held steady at 88.45 yen <JPY=>, after falling as
far as 88.32 yen on Wednesday, its lowest since mid-December.
Investors fret about a stronger yen as it eats into exporters'
profits when they are repatriated.
In other Asian markets, Hong Kong shares <> were down 0.5
percent and Shanghai shares <> fell 1 percent.
The U.S. Institute for Supply Management's gauge of service
sector activity and the ADP's report on private employment
pointed to a strengthening economy and stabilising labour market.
[]
Additional support for the market came after Greece's cabinet
approved sweeping budget cuts, the country's third savings
package in as many months, as it tries to secure European help to
tackle its massive debt burden.
The European Union praised the plan and said the country
could count on European solidarity, but German Chancellor Angela
Merkel, whose backing for any European safety net for Greece will
be vital, stopped short of any commitment to financial support.
[]
Greece's problems have rattled global markets in recent
weeks.
MITSUBISHI MOTORS SINKS, EXPORTERS DOWN
Mitsubishi Motors <7211.T> tumbled 9.1 percent to 120 yen
after it and Peugeot failed to agree on a capital alliance but
said on Wednesday they would continue talking about expanding
business ties. []
Other exporters also fell, with TDK Corp <6762.T> shedding
1.8 percent to 5,390 yen and Kyocera Corp <6971.T> slipping 0.9
percent to 7,980 yen. Honda Motor Co <7267.T> fell 0.7 precent to
3,080 yen.
But Elpida Memory <6665.T> gained 2.2 percent to 1,654 yen
after the chipmaker said it was in talks to buy the flash memory
assets of U.S. company Spansion <SPSNQ.PK>.
An Elpida spokesman declined to comment on how much the
company would spend on the purchase, but the Nikkei business
daily reported earlier that Elpida would pay 3-5 billion yen
($34-57 million). []
Nippon Yusen <9101.T> and other shipping firms climbed after
the Baltic Exchange's main sea freight index <.BADI>, which
tracks rates to ship dry commodities, rose to an over one-month
high on Wednesday with better coal and iron ore cargo demand
lifting sentiment. []
Nippon Yusen advanced 1.9 percent to 331 yen and Mitsui
O.S.K. Lines <9104.T> rose 1.4 percent to 594 yen. Kawasaki Kisen
K.K. <9107.T> gained 2.5 percent to 329 yen.
(Editing by Chris Gallagher)
