Nikkei edges down as investors take profits, eye yen

* Nikkei hit by profit-taking after two days of strong gains

* Yen in focus amid dearth of other major factors

By Elaine Lies

TOKYO, March 9 (Reuters) - Japan's Nikkei stock average lost 0.1 percent on Tuesday as investors sought to take profits after the benchmark closed at a six-week high the day before, though positive sentiment from last week's U.S. jobs data lingered.

Shares of Fujitsu (6702.T) extended losses on investor worries that a dispute with a former president over his abrupt resignation last year could hamper restructuring efforts at Japan's largest IT services firm. [ID:nTOE62702K]

Investors are turning their eyes to this Friday's settlement of Nikkei futures and options as well as next week's Bank of Japan policy board meeting.

"Given a lack of reasons to really push the Nikkei higher and the fact that it rose over 200 points yesterday, this is a good level for a bit of profit-taking," said Yutaka Miura, senior technical analyst at Mizuho Securities.

"We may be close to a short-term peak right now."

The benchmark Nikkei .N225 shed 8.87 points to 10,577.05 after rising more than 2 percent on Monday, while the broader Topix .TOPX lost 0.1 percent to 926.72.

Market players said technical indicators show the Nikkei is getting closer to levels where it may be considered overbought after rising more than 400 points in two consecutive trading days.

The Nikkei's relative strength index (RSI) came in at 60. Anything above 70 is considered overbought.

The benchmark has risen 50 percent from the bear market closing low of 7,054 hit on March 10, 2009 -- a level that was its lowest close since early October 1982.

"The Nikkei is likely to pivot around 10,500 for the rest of the week, with any breaks below that level likely to be quickly met by bargain-hunting," said Kenichi Hirano, operating officer at Tachibana Securities.

The dollar edged down 0.2 percent against the yen to 90.09 yen JPY=, and market players said currency levels had become a main focus in the dearth of other strong factors.

Investors fret about a stronger yen since it eats into exporter profits when repatriated.

Exporters were mixed, with Canon Inc (7751.T) down 0.5 percent to 3,960 yen and Honda Motor Co (7267.T) losing 0.3 percent to 3,220 yen, while Sony Corp (6758.T) gained 0.7 percent to 3,320 yen.

Panasonic Corp (6752.T) rose 1.5 percent to 1,327 yen after the electronics maker said it will launch its 3D TVs in the United States on Wednesday, and cooperate with top U.S. electronics retailer Best Buy Co (BBY.N) in promoting the products. [ID:nTOE627083]

But Fujitsu sank 1.9 percent to 557 yen after shedding 2.7 percent the previous day, when volume on Fujitsu jumped to 47 million shares, the largest daily tally in nearly 22 months and nearly 5 times the average volume over the past 30 days.

Shares of Jtekt Corp (6473.T) dropped 3 percent to 935 yen after Credit Suisse cut its rating on the autoparts maker to "neutral" from "outperform" and lowered the target price to 1,000 yen from 1,400 yen, citing flat growth prospects in sales to Toyota Motor Corp (7203.T) in the year to March 2011.

The stock was the biggest decliner among the Nikkei 225 issues. (Reporting by Elaine Lies; Editing by Edwina Gibbs)