*Nikkei up 0.9 pct, fall in oil prices eases inflation worry
*Fast Retailing rises on solid monthly sales growth
*Energy shares extend losses on cheaper oil
(Adds stocks and comments)
By Taiga Uranaka
TOKYO, Sept 3 (Reuters) - Japan's Nikkei stock average rose
0.9 percent on Wednesday, led by exporters like Honda Motor Co
Ltd <7267.T> after a steep drop in oil prices eased concerns over
rising inflation.
Index heavyweight Fast Retailing Co Ltd <9983.T> climbed
after the retailer reported solid same-store sales growth at its
Uniqlo casual clothing stores.
But the market's gain was limited as energy shares such as
oil and gas explorer Inpex Holdings Inc <1605.T> extended losses.
"The drop in oil prices is a hugely positive factor for
consumer spending in the U.S. and other markets, and that will
contribute to Japanese companies' sales," said Junichi Misawa,
executive officer at STB Asset Management.
"But in the short term, investors may be more concerned about
what's behind the fall in crude prices, which is demand worries
caused by the economic slowdown."
The benchmark Nikkei <> ended the morning up 109.21
points at 12,718.68. The broader Topix <> gained 0.8 percent
to 1,222.36.
FAST RETAILING UP
Fast Retailing climbed 2.5 percent to 11,290 yen after the
retailer said that same-store sales at its Uniqlo casual clothing
stores in Japan rose 4.2 percent in August, lifted by solid sales
of autumn items. It will hold a business strategy briefing later
in the day.
Honda rose 4.5 percent to 3,510 yen, becoming the biggest
contributor to the Nikkei.
Inpex shed 4 percent to 1.024 million yen after U.S. crude
oil futures tumbled on Tuesday as Hurricane Gustav's impact on
Gulf of Mexico oil rigs and platforms and Gulf Coast refineries
was seen as limited, and as a resurgent dollar pressured the
market. []
Trading houses were also hit as they have stakes in overseas
oil fields and their profits are boosted when oil prices rise.
Mitsui & Co <8031.T> plunged 5.4 percent to 1,693 yen and
Mitsubishi Corp <8058.T> slid 4.1 percent to 2,710 yen.
Paper mills, considered among the biggest beneficiaries of
cheaper oil, jumped, with Nippon Paper Group Inc <3893.T> up 8.4
percent at 334,000 yen and Oji Paper Co Ltd <3861.T> gaining 6.9
percent to 586 yen.
Elpida Memory Inc <6665.T> tumbled 12.1 percent to 2,030 yen
after Nomura Securities cut its rating on the world's No. 3 maker
of dynamic random access memory (DRAM) chips to "neutral" from
"buy", predicting an operating loss this year.
Trade picked up slightly, with 852 million shares changing
hands compared with last week's morning average of 676 million.
Advancing shares outnumbered declining ones by more than 2 to
1.
(Editing by Chris Gallagher)
