Nikkei edges down as tech shares sold, Honda jumps

                                
 * Honda climbs after positive earnings surprise, Canon falls
                                
 * Chip-related shares sold after Nasdaq, chip index slide
                                
 * Support seen holding solid around 25-day moving average
                                
 * Trade thins ahead of Japan results peak later this week
                                
 By Elaine Lies
                                
 TOKYO, Oct 28 (Reuters) - Japan's Nikkei stock average edged
down 0.7 percent as Advantest <6857.T> and other tech shares
slipped after weaker-than-expected U.S. consumer confidence data
prompted investors to take profits in U.S. equities.
                                
 But Honda Motor Co <7267.T> climbed nearly 4 percent after it
surprised with a near tripling of its annual profit forecasts
that some said may yet be conservative, bumping it further ahead
of rivals thanks to a dominant motorcycle business and line-up
heavy in small cars. [ID:nT324227]
                                
 Other auto shares were strong as well, providing support for
the market, analysts said.
 "The falls in New York indexes, in some cases for the third
day in the row, raise the possibility of a true correction, with
concern growing that it means a correction for share markets
around the world," said Yutaka Miura, senior technical analyst at
Mizuho Securities.
                                
 "Trade today is likely to be a tug-of-war between this
concern on the one hand and good factors for individual shares,
such as the Honda results."
                                
 The benchmark Nikkei <.N225> shed 67.91 points to 10,144.55,
and appeared to be heading for its lowest close in two weeks.
The broader Topix <.TOPX> lost 0.3 percent to 893.24.
                                
 Analysts said support for the Nikkei was likely to hold solid
around 10,120, which is where its 25-day moving average currently
comes in. It has gained roughly 45 percent since Oct. 28 last
year, when it hit a 26-year intraday low of 6994.90.
                                
 They added that movements had been exaggerated by thin volume
as investors wait to see results later this week and next week,
with big-name stocks such as Sony Corp <6758.T> and Toyota Motor
Corp <7203.T> yet to announce.
                                
 Nomura Holdings <8604.T>, Japan's biggest brokerage, and
electronics conglomerate Fujitsu Ltd <6702.T> both announce after
the bell on Wednesday.
                                
 "Given the poor sentiment overseas, the Nikkei is actually
not falling as much as might be expected, with support coming
from expectations for earnings yet to come," said Hideyuki
Ishiguro, a supervisor at Okasan Securities.
                                
 The Dow Jones industrial average <.DJI> eked out a slim gain
on Tuesday, but the S&P 500 <.SPX> and Nasdaq <.IXIC> posted
their third straight day of losses.
                                
 The Conference Board's index of consumer confidence fell to
47.7 in October, weaker than forecast and showing that consumers
were increasingly concerned about job market conditions.
[ID:nN27241974]
                                
 TECHS FALL, AUTOS POWER HIGHER
                                
 Tech shares fell after the Nasdaq marked its third day of
losses, with chip-related shares particularly vulnerable after
the Philadelphia Semiconductor Index <.SOXX> lost 2.5 percent.
                                
 Analysts said that while there was likely to have been some
impact from the consumer confidence survey, expectations for
Christmas sales were fair and U.S. shares had mainly been poised
for profit-taking after recent rises.
                                
 Advantest, which makes chip testing equipment, lost 3.9
percent to 2,240 yen and Tokyo Electron <8035.T>, the world's
second-largest semiconductor equipment maker, shed 3.6 percent to
5,400 yen. Nikon <7731.T>, a key maker of steppers, lost 3
percent to 1,694 yen.
                                
 But auto shares powered higher, boosted by Honda.
                                
 Honda gained 3.7 percent to 2,950 yen, while Toyota Motor
Corp <7203.T> rose 1.1 percent to 3,640 yen and Nissan Motor Co
<7201.T> rose 1.2 percent to 671 yen.
                                
 Shares of Canon <7751.T> and Ricoh <7752.T> dropped after
they reported sharp falls in quarterly profit on sluggish copier
demand as companies reined in spending.
                                
 Canon slid 3.6 percent to 3,450 yen, while Ricoh lost 1.7
percent to 1,235 yen.
                                
 Both Canon and Ricoh stood by their annual operating income
forecasts, which call for 62 percent and 46 percent slides in
profit respectively, as they see no clear end to the current
slump in office equipment demand. [ID:nT203059]
                                
 Although other defensive stocks gained ground, household
goods maker Kao Corp <4452.T> fell 4.4 percent to 2,055 yen after
it slashed its annual earnings projections, citing a
deeper-than-expected slump in cosmetics sales.
                                
 Trade was thin, with 817 million shares changing hands on the
Tokyo exchange's first section compared with last week's morning
average of 884 million.
                                
 Declining shares beat advancing ones, 926 to 619.
 (Reporting by Elaine Lies; Editing by Edwina Gibbs)