Nikkei slips as exporters sold

TOKYO (Reuters) - Japan's Nikkei (news) stock average lost 1.2 percent on Thursday with Canon Inc and other exporters slipping as investors, prompted by a slightly stronger yen, locked in profits ahead of U.S. jobs data.

Sanyo Electric Co lost a fifth of its value after Panasonic Corp launched a tender offer for shares in the world's largest rechargeable battery maker.

Although Panasonic's offer was unchanged from terms announced a year ago, market players said there had been some speculation among some market players it could revise up its offer price closer to Sanyo's trading price.

But Nissan Motor Co rose after Japan's third-biggest automaker revised its annual outlook to a profit from a loss as soaring sales in China helped drive quarterly earnings beyond market expectations.

The Federal Reserve reiterated its intent to keep interest rates low on Wednesday, in line with expectations. Though Wall Street rallied in response it soon lost steam, with investors turning their eyes to jobs data due out on Friday.

"A lot of investors are likely to be staying on the sidelines ahead of the jobs data, given that the September figures were worse than expected, and this is may keep stocks weak until then," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

The benchmark Nikkei lost 113.63 points to 9,730.68 and appeared headed for its lowest close in a month, while the broader Topix shed 0.7 percent to 874.78.

The private-sector jobs report by ADP Employers Services, often seen as foreshadowing the government figures, showed companies cut 203,000 jobs in October, fewer than the revised 227,000 in September and the lowest since July 2008.

Analysts polled by Reuters expect Friday's employment report to show that U.S. payrolls shrank by 175,000 and the unemployment rate hit a new 26-year-high of 9.9 percent in October.

Market players said investors were also likely to be less active as they waited for earnings of companies such as Toyota Motor Corp , which will announce its results after the market closes on Thursday.

"The yen has gained slightly on the dollar, and this has prompted profit-taking among short-term investors, especially among shares that have already announced results," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

The dollar lost 0.2 percent to 90.46 yen, pressured by the Federal Reserve reiterating its commitment on low rates.

PROFIT-TAKING HITS

Sanyo dropped 19.9 percent to 173 yen but was still above Panasonic (Frankfurt: 853666 - news) 's offer of 131 yen.

Exporters slipped on profit-taking as a result, with Canon (Berlin: CNN1.BE - news) losing 1.5 percent to 3,350 yen, Sony Corp down 2.1 percent to 2,550 yen, and Honda Motor Co (Paris: JP3854600008 - news) losing 2.8 percent to 2,780 yen.

Astellas Pharma Inc (ALPMF.PK - news) , which is due to announce results after the close, fell 2.4 percent to 3,310 yen.

But this was countered by gains in a broad range of shares, particularly those with robust results or upward revisions in their forecasts.

Nissan rose 1.1 percent to 668 yen after the company, owned 44 percent by Renault SA (Paris: FR0000131906 - news) , said it now expects an operating profit of 120 billion yen ($1.3 billion) in the year to March, instead of the 100 billion yen loss it had forecast previously.

Sumitomo Heavy Industries rose 4.1 percent to 433 yen after it raised its full-year operating profit forecast by a third, helped by a smaller-than-expected rise in steel costs and an easing of product price falls.

Oil and gas field developer Inpex climbed 4.9 percent to 793,000 yen after lifting its annual recurring profit forecast by 26 percent to 372 billion yen, saying oil prices were moving higher than expected.

Trade picked up slightly, with 983 million shares changing hands compared with last week's morning average of 924 million.

Declining stocks outnumbered advancing ones by more than 3 to 1.

(Reporting by Elaine Lies; Editing by Edwina Gibbs)