* Stocks fall after yen hits 5-month highs versus dollar
* Retreat limited as Alcoa reports smaller-than-expected loss
* Mitsubishi Motors gains on plug-in hybrid report
By Shinichi Saoshiro
TOKYO, July 9 (Reuters) - Japan's Nikkei average fell 0.5
percent on Thursday, with exporters such as Canon Inc <7751.T>
retreating as the yen surged to 5-month highs against the dollar
the previous day on growing concerns about the health of the
global economy.
The Nikkei's decline was cushioned, however, after U.S.
aluminium giant Alcoa Inc <AA.N> reported a smaller-than-expected
loss after the market close on Wednesday, giving a positive tone
to the start of the closely-watched U.S. earnings season.
"It is mostly about the yen today. The stock market is on the
backfoot as the currency not only sliced below the 94 yen
threshold but went on to advance below 92 yen. This is not good
news for exporters," said Yumi Nishimura, a deputy general
manager at Daiwa Securities SMBC.
The benchmark Nikkei <> fell 49.67 points to 9,371.08.
In early trade the index hit 9,307.81, its lowest level since
late May, before paring some losses as the dollar rebounded above
93 yen on Thursday after sliding to a five-month low of around
91.8 yen the previous day. []
The broader Topix declined 1 percent to 879.75.
Market watchers said the Nikkei's break below its 65-day
moving average of around 9,400 exacerbated selling early in the
session.
"From a technical viewpoint, really solid resistance for the
Nikkei may not be seen until the 200-day moving average of
approximately 9,000," said Yutaka Miura, a senior technical
analyst at Mizuho Securities.
ENERGY-LINKED SHARES DOWN, SHIPPERS ADVANCE
Energy-linked shares fell in the wake of the continuing
decline in oil <CLc1>, which dropped over 4 percent on Wednesday
for its sixth straight day of losses. []
Oil refiner and distributor Cosmo Oil Corp <5007.T> dropped
1.1 percent to 283 yen and Nippon Oil Corp <5001.T>, the largest
oil distributor in Japan, lost 1 percent to 488 yen. Oil and gas
field developer Japan Petroleum Exploration <1662.T> fell 1.9
percent to 4,600 yen.
Shippers advanced after Nikko Citigroup lifted its rating on
Mitsui O.S.K. Lines <9104.T> to "1M" from "2M", saying the stock
looks undervalued, and upgraded Nippon Yusen KK <9101.T> to "2M"
from "3M", saying it now looks appropriately valued.
Mitsui O.S.K. climbed 3.1 percent to 572 yen and Nippon Yusen
rose 1.5 percent to 400 yen. Kawasaki Kisen Kaisha <9107.T>
gained 2.2 percent to 370 yen.
The sea transport subindex <.ISHIP.T> climbed 2.5 percent to
become the biggest gainer among the subindexes.
Among exporters, camera and office equipment maker Canon shed
1.3 percent to 2,945 yen and Toyota Motor Corp <7203.T> lost 1.7
percent to 3,410 yen. Honda Motor Co <7267.T> dropped 2.3 percent
to 2,335 yen.
But Mitsubishi Motors Corp <7211.T> gained 1.2 percent to 163
yen after a newspaper said it and French carmaker Peugeot Citroen
<PEUP.PA> will work together to develop and produce parts for
plug-in hybrid vehicles.[]
Shares of Clarion Co <6796.T>, a maker of car audio
equipment, dropped 3.4 percent to 86 yen after the Nikkei
business daily said the company is expected to post an operating
loss of about 2 billion yen for the April-June quarter due to
sluggish domestic sales of automotive electronics.
Trade picked up on the Tokyo exchange's first section, with
1.1 billion shares changing hands, compared with last week's
morning average of 955 million.
Declining stocks outnumbered advancing ones by more than 2 to
1.
(Editing by Joseph Radford)
