* Nikkei up 0.6 pct, China rate cut boosts related shares
* Panasonic hits 5-year low after cutting profit forecasts
* October output data stokes recession fears
(Adds stocks, detail)
By Rika Otsuka
TOKYO, Nov 28 (Reuters) - Japan's Nikkei average edged up 0.6
percent on Friday, cheered by an interest rate cut China but held
back by a plunge in Panasonic Corp <6752.T> after a drastic cut
in its outlook.
Gains were led by shipping firms such as Kawasaki Kisen
<9107.T>, trading houses such as Itochu Corp <8001.T> and
construction machinery companies such as Komatsu Ltd <6301.T>,
extending advances made a day earlier after China axed rates by
over 100 basis points on Wednesday to prop up growth.
"China-related shares continue to rally on expectations that
China's rate cut will support its economy," said Toshiyuki
Kanayama, a market analyst at Monex Inc.
Meanwhile, weak output data and the downward revision by
Panasonic kept investors careful about chasing prices higher,
analysts said.
Panasonic, the world's No.1 plasma TV maker, dived 11
percent after cutting its annual net profit forecast by 90
percent and announcing plans to restructure as the global
financial crisis dampens sales of TVs and other electronics.
[]
"Panasonic's earnings forecasts underscored the deteriorating
health of the economy," said Terushi Hirotama, head of trading at
Ichiyoshi Securities.
"Until recently, investors had believed that Panasonic could
withstand the downturn. But now, investors are saying 'Panasonic.
You too?'
The benchmark Nikkei <> climbed 47.70 points to 8,421.09
after rising 2 percent the previous day. The broader TOPIX index
<> was little changed on the day at 828.82.
Trade was thin, with 746 million shares changing hands on the
Tokyo exchange's first section compared with last week's
morning average of 932 million. Declining shares outnumbered
advancers 794 to 774.
Many investors took a back seat as there were fewer fresh
factors from overseas after U.S. financial markets were closed on
Thursday for the Thanksgiving holiday.
Government data showed on Friday that Japanese industrial
production dropped sharply in October, prompting warnings that
Japan's recession will be even deeper and longer than previously
thought. []
On the other hand, data showed Japan's unemployment rate
unexpectedly fell to 3.7 percent in October, down from 4.0
percent in September. []
Kawasaki Kisen climbed 4.9 percent to 383 yen, Itochu
advanced 6.3 precent to 471 yen and Komatsu jumped 5.6 percent to
1,130 yen.
JFE Steel Corp, the world's third-largest steelmaker, said on
Friday it was considering building a plant to process iron ore in
the Middle East. []
JFE Holdings <5411.T>, the parent company of JFE Steel, rose
4.9 percent to 2,265 yen.
Panasonic tumbled 11 percent to 1,143 yen after hitting a
five-year low of 1,131 yen.
(Editing by Michael Watson)
