* Exporters down after yen touches 2-mth high on dollar
* Techs mixed, with some gaining on short-covering
* Defensive shares provide support
By Elaine Lies
TOKYO, May 22 (Reuters) - Japan's Nikkei stock average edged
down 0.1 percent on Friday, with Canon Inc <7751.T> and other
exporters hit by a stronger yen but defensive shares holding
their own amid a sense the overall trend remains unchanged.
Support came from some high tech shares such as industrial
robot maker Fanuc <6954.T>, which rose on short covering, though
the sector was mixed overall.
The dollar fell as worries about U.S. debt levels grew after
Standard & Poor's warned there was a 1 in 3 chance the U.K. could
lose its precious triple-A credit rating because of the danger
government debt may soar near 100 percent of GDP. []
The move raised fears that the United States, with its
increasing budget deficit and weakened economy, could face the
same situation, sending the dollar and Wall Street lower.
"Markets all around the world appear to be looking for
direction, and any chance of a U.S. downgrade would really hit
U.S. assets such as the dollar and stocks," said Masayoshi
Okamoto, head of dealing at Jujiya Securities.
The benchmark Nikkei <> shed 7.35 points to 9,256.80
after earlier losing as much as 1.5 percent, but at one point
turning briefly positive amid a rise in other Asian shares. The
broader Topix <> fell 0.4 percent to 878.02.
The dollar was down 0.2 percent against the yen at 94.13 yen
<JPY=> after earlier falling as low as 93.86 yen on electronic
trading platform EBS.
But analysts in Tokyo said it was still too early to say the
overall trend for the Nikkei has changed for the worse, noting
that support near 9,000 -- around where the 25-day moving average
comes in -- has held all week despite tests.
"We're seeing some consolidation after the markets rose a bit
too fast. What's been happening this week globally is that
markets have gotten a bit of a reality check on the state of the
overall economy," said Koichi Ogawa, chief portfolio manager at
Daiwa SB Investments.
"The Nikkei trend is unlikely to change unless the dollar
really falls against the yen, and even the 93-94 yen level might
still be all right. But a fall down to 90 yen could be very bad."
A stronger yen eats into exporters' profits when repatriated.
VULNERABLE TIME
MSCI's measure of Asia Pacific stocks excluding Japan
<.MSCIAPJ0000PUS> rose 0.3 percent.
Though off earlier lows, many exporters remained shaky.
Canon lost 1.2 percent to 3,190 yen and Toyota Motor Corp
<7203.T> lost 1.9 percent to 3,580 yen, while Sony slipped 1.8
percent to 2,455 yen.
Honda Motor Co <7267.T>, though, turned positive, rising 1.3
percent to 2,680 yen.
Fanuc rose 1.9 percent to 7,650 yen and Tokyo Electron
<8035.T> rose 1.6 percent to 4,450 yen, boosted by short
covering. Kyocera Corp <6971.T> edged up 0.3 percent to 7,310
after starting the morning negative.
Shares of trading house Sumitomo Corp <8053.T> pared losses
to 0.3 percent after the company said it had put on hold its
plans to build and operate a $6 billion power and water
desalination plant in Saudi Arabia. []
Retailers gained, with Isetan Mitsukoshi <3099.T> rising 2.6
percent to 835 yen. Defensive shares such as Nippon Meat Packers
<2282.T> also climbed.
Manufacturers of medical masks and the cloth used to make
them extended their gains as the number of H1N1 flu cases
increased in Japan, with Unitika <3103.T> up 1.1 percent to 94
yen and Shikibo <3109.T> climbing 1.6 percent to 193 yen.
Trade was light on the Tokyo exchange's first section, with
980 million shares changing hands, below last week's morning
average of 1.2 billion.
Declining stocks outnumbered advancing ones, 834 to 660.
(Reporting by Elaine Lies; Editing by Hugh Lawson)
