* Nikkei pares losses after opening lower
* Index heavyweight Fast Retailing rises ahead of earnings
* Investors not seeing feared jump in oil prices
(Adds stocks and comments)
By Taiga Uranaka
TOKYO, July 10 (Reuters) - The Nikkei stock average shook
off most of its earlier losses to end morning trade down 0.1
percent on Thursday, with gains by banks offsetting declines in
high-tech firms such as Canon Inc <7751.T>.
Fast Retailing Co <9983.T> climbed 3 percent after Credit
Suisse forecast solid earnings when the casual clothing retailer
releases third-quarter results after the close.
The market opened lower following steep losses on Wall
Street, but it reversed direction and briefly moved into
positive territory as a feared jump in oil prices didn't
materialise after news of an Iran missile test on Wednesday.
"Oil prices ended little changed yesterday. It provided a
relief to investors," said Noritsugu Hirakawa, strategist at
Okasan Securities. "And technicals suggest Japanese stocks have
been oversold."
He and other market analysts said trading in connection with
settlement of index options on Friday was also providing a floor
for the Nikkei as some options traders were trying to keep the
Nikkei at around 13,000.
The benchmark Nikkei <> ended the morning down 12.64
points at 13,039.49. The broader Topix <> dipped 0.1
percent to 1,284.91.
Bank shares were firm, with top lender Mitsubishi UFJ
Financial Group <8306.T> rising 1.8 percent to 972 yen while
No.2 Mizuho Financial Group <8411.T> gained 0.6 percent to
515,000 yen.
"Japanese stocks are chosen for passive reasons. Japanese
banks are seen relatively distant from the credit problems U.S.
and European rivals are suffering," said Yasuhiro Miyata, senior
portfolio manager at asset management firm Diam.
"Also among Asian markets, Japan's economic and political
situations are considered relatively stable," he said
U.S. stocks tumbled on Wednesday, dragging the S&P 500 into
a bear market, as worries about more credit-related losses hurt
financial companies and Cisco Systems <CSCO.O> led technology
shares lower after its CEO raised fears of an extended economic
downturn.
FAST RETAILING UP
Fast Retailing, operator of the Uniqlo casual clothing
chain, rose to 10,070 yen, becoming the biggest positive
contributor to the Nikkei.
Credit Suisse analyst Dairo Murata wrote in a note to
clients that he expects Fast Retailing's second half earnings to
maintain the strength seen in the first half.
"... with major retailers in general experiencing sluggish
earnings, the market may again look positively at FR's
exceptionally solid results," he wrote.
Digital camera maker Canon fell 1.9 percent to 5,160 yen,
one of the biggest drags on the Nikkei.
GS Yuasa Corp <6674.T> rose 2 percent to 452 yen after the
Nikkei business daily said Mitsubishi Motors Corp <7211.T> will
start selling electric cars to retail customers next year, a
year ahead of schedule, as it sees opportunities for these cars
amid surging gasoline prices.
GS Yuasa, Asia's biggest car battery maker, has set up a
joint venture with Mitsubishi Motors and Mitsubishi Corp
<8058.T> to produce lithium-ion batteries for electric cars.
Mitsubishi Motors rose 0.5 percent to 188 yen, while
Mitsubishi Corp fell 1.9 percent to 3,140 yen.
Trade picked up on the Tokyo exchange's first section, with
984 million shares changing hands, above last week's morning
average of 900 million.
Declining stocks outpaced advancing ones by 834 to 721.
