* Nikkei briefly falls below 10,000, profit-taking weighs
* Suzuki up after sources say VW to take up to 20 pct stake
* Aeon jumps; struggling unit Talbots to end relationship
By Aiko Hayashi
TOKYO, Dec 9 (Reuters) - Japan's Nikkei average slipped 1.3
percent on Wednesday, as debt problems in Greece and Dubai
dampened investor confidence and pushed up the yen which weighed
on Honda Motor Co <7267.T> and other exporters.
Adding to the downbeat tone, revised GDP data showed Japan's
recovery was slowing, while a weaker-than-expected outlook from
diversified manufacturer 3M <MMM.N> and disappointing sales from
McDonald's <MCD.N> dragged U.S. stocks lower.
But Suzuki Motor Corp <7269.T> climbed nearly 4 percent after
sources told Reuters that Volkswagen AG <VOWG.DE> plans to take a
stake of up to 20 percent in it, providing Suzuki with a
much-needed development partner and giving VW access to better
small-car technology. []
Fitch Ratings downgraded Greece, fanning fears about rising
sovereign debt troubles, while Moody's cut the ratings of six
Dubai-linked issuers after concluding that no "meaningful"
government support would be provided to top firms like DP World.
[] [].
"Worries about currency moves are playing a big role in
today's fall," said Yumi Nishimura, deputy general manager at
Daiwa Securities SMBC.
"Behind the moves in the currency market are credit concerns
for Greece and Dubai and the uncertainty of those situations is
also making investors here cautious and prompting some to take
profits."
The benchmark Nikkei <> shed 127.31 points to 10,013.16,
after rising more than 10 percent last week.
The broader Topix <> fell 1.1 percent to 886.82.
Amid rising debt woes for Greece and Dubai, the yen retained
broad gains made the previous day as investor risk aversion rose,
and it was trading slightly higher at 88.40 yen to the dollar.
[]
Both the yen and the dollar tend to gain when worries about a
global recovery or concerns about debt defaults rattle markets.
In the stock market, market players fret about a stronger yen as
it curbs exporters' profits when they are repatriated.
Japan's economy grew 0.3 percent in the third quarter,
revised government data showed on Wednesday, much slower than an
initial reading of 1.2 percent growth due to weaker corporate
spending. []
"Underlying capital spending has bottomed out, company
production and profits have been recovering, so the economy is
unlikely to suffer a soft patch or double-dip recession as some
fear," said Tatsushi Shikano, senior economist, Mitsubishi UFJ
Securities.
"Still, the biggest risk may come from the yen's rise as it
would squeeze company profits and weigh on share prices."
EXPORTERS WEIGH, SUZUKI JUMPS
Shares of exporters fell, with Honda slipping 1.5 percent to
2,995 yen and Toyota Motor Corp <7203.T> declining 1.3 percent to
3,700 yen.
But Suzuki advanced 3.9 percent to 2,380 yen. The Nikkei
business daily quoted Suzuki CEO Osamu Suzuki as admitting to the
talks on Wednesday and saying that Suzuki was not in negotiations
with anyone other than Volkswagen.
Resource-linked shares lost ground as commodity prices fell
amid the general investor retreat from riskier assets. Oil prices
tumbled for a fifth straight session and gold hit three-week lows
on Tuesday. []
Mitsubishi Corp <8058.T>, Japan's largest trading house, fell
1.8 percent to 2,195 yen and fellow trader Mitsui & Co <8031.T>
lost 3.6 percent to 1,230 yen.
But shares of Aeon Co Ltd <8267.T> jumped 3.6 percent to 754
yen after Talbots Inc <TLB.N> laid out an acquisition and
financing plan that would reduce debt and end a 21-year
relationship with its Japan-based majority owner.
Talbots has struggled with a string of losses, a heavy debt
burden and weak sales in the downturn. []
(Additional reporting by the Tokyo newsroom; Editing by Edwina
Gibbs)
