Nikkei edges up 0.1 pct after touching 10-week low

                                
 * Fast Retailing <9983.T> surges on jump in same-store sales
                                
 * Exporters such as Sony <6758.T> edge lower
                                
 * Rise in defensive and financial shares lends support
                                
 * Trade light, below last week's morning average
                                
 By Masayuki Kitano
                                
 TOKYO, Oct 5 (Reuters) - Japan's Nikkei share average edged
up 0.1 percent on Monday on gains in bank shares and retailers
after touching a 10-week low on concern over the fragility of the
U.S. economic recovery.
                                
 A surge in shares of Fast Retailing <9983.T>, which saw
domestic same-store sales at its Uniqlo casual-clothing jump 32
percent in September, helped pull the Nikkei into positive
territory. [ID:nT307526]
                                
 But exporters such as Sony <6758.T> and Honda Motor <7267.T>
retreated on lingering concern that the yen's recent strength is
set to eat into their overseas profits.
                                
 The Nikkei earlier dipped to a 10-week low after U.S. jobs
data but analysts said the data did not drastically alter
expectations for the U.S. economy to recover gradually.
                                
 "While the data was bad and optimism about the U.S. economy
may have receded, I do not think market players think that this
means that the outlook for the U.S. economy is ruined," said
Hideyuki Ishiguro, supervisor at Okasan Securities' investment
strategy department.
 "I think it just means market sentiment has returned to
neutral for the time being," Ishiguro added.
                                
 The Nikkei was up 4.76 points or nearly 0.1 percent at
9,736.63 <.N225>, after falling as low as 9,713.92, its lowest
since July 23.
                                
 The broader Topix fell 0.3 percent to 871.78 <.TOPX>.
                                
 Trade was light on the Tokyo exchange's first section, with
845 million shares changing hands, below last week's morning
average of 928 million.
                                
 The Nikkei fell 5.2 percent last week, its worst weekly loss
in about three months. It has fallen below trendline support
drawn from its March trough near 7,021 and through its July low
near 9,050, and on Friday the benchmark index dropped below the
bottom of the cloud on daily Ichimoku charts.
                                
 Some analysts say the next downside target may be 9,500, with
a break below that opening the way for a drop towards its July
low of 9,050.
                                
 DEFENSIVE SHARES RISE
                                
 Banking shares <.IBNKS.T> rose after having recently been
battered by worries that lenders may come out with share
offerings in the face of a global regulatory push for banks to
carry bigger capital buffers.
                                
 Top bank Mitsubishi UFJ Financial Group <8306.T> climbed 2.9
percent to 458 yen, while the banking sector subindex climbed 1.3
percent.
                                
 Fast Retailing climbed 12.4 percent 13,240 yen. The big jump
in sales was helped by the onset of cold weather which boosted
demand for autumn goods and by a five-day weekend in September.
The retail subindex added 1 percent.
                                
 Other defensive sectors were also higher.
                                
 "Telephone companies and pharmaceuticals are broadly firmer
and helping pull the market higher," said Nagayuki Yamagishi,
investment strategist at Mitsubishi UFJ Securities.
                                
 KDDI Corp <9433.T>, Japan's No.2 phone operator, rose 1.8
percent to 515,000 yen and NTT DoCoMo <9437.T> climbed 1.9
percent to 142,700 yen. The pharmaceutical sub-index edged up 0.3
percent <.IPHAM.T>.
                                
 Among exporters, Sony Corp <6758.T> fell 1.2 percent to 2,420
yen, Nikon <7731.T> dropped 4.5 percent to 1,481 yen and Honda
Motor <7267.T> dipped 1.1 percent to 2,640 yen.
 But Toyota Motor Corp <7203.T> was steady at 3,380 yen.
                                
 The rise in defensive shares and the decline in exporters may
be a sign that some institutional investors are shifting into
shares of firms that rely on domestic demand and out of companies
that depend on overseas demand, said Tomomi Yamashita, fund
manager at Shinkin Asset Management.
                                
 The yen's recent strength may be one factor that is prompting
such tweaks to investor portfolios, Yamashita said.
                                
 The yen stood at 89.81 yen to the dollar <JPY=>. It hit an
eight-month high of 88.23 yen to the dollar last Monday, stirring
worries about the impact on Japanese exporters.
                                
 The head of Toyota on Friday called the current dollar-yen
rate "very tough", and Honda Chief Executive Takanobu Ito said on
Thursday a dollar below 90 yen was "too painful". [ID:nT297464]
[ID:nT188490]
                                
 Declining stocks outnumbered advancing ones by more than 2 to
1.