* Nikkei on downtrend; caution continues on yen -fund manager
* Technicals mixed; slow stochastic in oversold territory
* Nikkei on course for 4 pct weekly fall, worst in a month
By Aiko Hayashi
TOKYO, Aug 13 (Reuters) - Japan's Nikkei rose 0.4 percent on
Friday, drawing support from an apparent halt in the yen's
advance against the dollar after Japanese officials stepped up
their campaign against the yen's rise with a series of comments.
But the benchmark lacked clear direction, moving in and out
of negative territory, as investors remained doubtful that
dollar/yen moves will stabilise anytime soon. They also grew
cautious after weak jobs data underscored persistent worries
about the sluggish pace of the U.S. economic recovery.
On the week, the Nikkei is poised to book a 4 percent fall,
in what would be its worst weekly decline in about a month, with
shares of exporters hit hard by worries about the impact of the
strong yen and a weakening outlook for global demand on their
earnings.
"The market is still clearly on a downtrend. The yen's
advance, which has been the main cause of recent market slides,
is coming to a halt and that's why investors have stopped selling
for now," said Mitsushige Akino, chief fund manager at Ichiyoshi
Investment Management.
"But a majority of market participants doubt yen appreciation
will end here, unless more substantial measures are taken in
Japan, such as an easing in monetary policy or intervention."
The yen rose to a 15-year high against the dollar of 84.72
yen this week on trading platform EBS, and market players say the
chances of intervention at some point cannot be ruled out.
But on Friday the yen was weaker at 86.06 yen <JPY=>, helped
by a report Japan's prime minister and the head of its central
bank would meet to discuss ways to deal with the Japanese
currency's strength.
The benchmark Nikkei <> added 38.79 points to 9,251.38.
It touched a 13-month low on Thursday before paring losses.
The broader Topix <> rose 0.3 percent to 830.47.
If the dollar falls back below 85 yen, market players say the
Nikkei could break below 9,000, although they add there are
support levels at 9,091, a low hit last month, and 9,076, a
trough marked in November 2009.
Wall Street ended lower for a third straight day as jobless
claims rose unexpectedly to a nearly six-month high, the second
straight week of increases. []
A slew of U.S. indicators are due out later on Friday,
including consumer price data as well as July retail sales, with
already holiday-thinned trade likely to slow further as investors
take a wait-and-see stance.
"Certainly there's concern about the U.S. economy, but
there's also growing concern about various sectors going forward,
both in Japan and overseas, as the result of things like rising
inventories," said Hiroaki Osakabe, fund manager at Chibagin
Asset Management.
"Whether the Nikkei breaks 9,000 or not has now become a key
issue."
REBOUND OR DOWNTREND?
Charts suggest the Nikkei could be due for a bit of a
rebound, with the benchmark on Thursday breaking under its lower
Bollinger Band. The Nikkei's slow stochastic, a measure of how
oversold the market is, has also fallen into oversold territory.
But its MACD, a measure of market momentum, is still pointing
downward after a bearish cross.
Some exporters recouped ground after sharp falls, with Canon
Inc <7751.T> rising 0.3 percent to 3,585 yen and Sony Corp
<6758.T> gaining 1.2 percent to 2,595 yen.
Panasonic Corp <6752.T> climbed 2.2 percent to 1,088 yen
after Goldman Sachs raised its rating on the stock to "buy" from
"neutral", citing a good medium-term buying opportunity.
"We think equity finance is the last negative catalyst and
think the market will focus on medium-term growth," Goldman Sachs
analysts wrote in a client note.
But CSK Holdings <9737.T>, an information services company,
tumbled 7 percent to 305 yen after Deutsche Securities cut its
target price for the stock to 280 yen from 350 yen. It maintained
its "sell" rating.
(Editing by Edwina Gibbs)
