Nikkei eases; loss forecasts hit Nintendo, NEC

* Nikkei slips 0.1 pct on the day, but up 3rd straight week
* Nintendo hits 8-year low after weak earnings
* NEC sinks after net loss forecast
* Komatsu rises, boosted by Caterpillar results

By Dominic Lau
TOKYO, Jan 27 (Reuters) - Japanese shares slipped on
Friday, easing further from a three-month high hit earlier this
week, after forecasts of big annual losses from NEC Corp
, Nintendo Co Ltd and Nippon Steel Corp
.
The U.S. Federal Reserve's announcement this week that it
would keep short-term interest rates "exceptionally low" at
least until 2014 has helped underpin sentiment, however.
The Nikkei closed 0.1 percent lower at 8,841.22 in a
choppy session, though it was up 0.9 percent for the week -- its
third straight week of gains.
The benchmark is up 4.6 percent this month, and if the index
were to finish with its current gains, it would be the best
January performance since 1999.
Nintendo and NEC slid, the latest casualties of Apple Inc's
success with its iPhone.
Nintendo reported a sharp drop in quarterly profit and
forecast a bigger-than-expected annual loss as its 3DS and Wii
gaming devices failed to shine amid a consumer shift to iPhones
and iPads. Its shares ended 4.1 percent lower, after shedding as
much as 7.8 percent to hit an eight-year low.
NEC sank 7.1 percent after it warned on Thursday it would
cut 10,000 jobs and post a net loss of 100 billion yen ($1.3
billion) for the year ending in March, because of weak demand
for its smartphones amid the popularity of the iPhone in Japan.

Apple's success has taken the shine off Japanese electronic
and tech companies, which dominated the global industry in the
1980s and 1990s.
Based on Thursday's closing prices, Apple's market
capitalisation was 74 percent more than the combined valuation
of Canon, Nintendo, Sony Corp, Panasonic Corp
, Toshiba Corp, Hitachi Ltd,
Mitsubishi Electric Corp, Fujifilm, Fujitsu
Ltd, Sharp Corp, Tokyo Electron Ltd
and Hoya Corp.
The broader Topix dropped 0.5 percent to
761.13 on Friday. Volume moderated, with 1.93 billion shares
changing hands on the main board, down from 1.96 billion shares
on Thursday and 2.2 billion on Wednesday .
Stefan Worrall, director of equity at Credit Suisse in
Tokyo, said the market remained relatively bullish.
"There are the reasons to take profit but at the same time
there has been a clear loosening of U.S. monetary policy it
seems in the context of those (Fed) forecasts. We continue to
see underweight long only positions being normalised, which
provides some buying pressure," he said.

NIPPON STEEL DOWN, KOMATSU UP
Hot on the heels of NEC and Nintendo, Nippon Steel, the
world's No. 4 steelmaker, cut its annual profit outlook by
one-third, as exports tumbled and prices sagged on higher
supplies. Its shares dropped 3.5 percent.
Elpida Memory Inc sank 7.1 percent after the Nikkei
business daily said the chipmaker is likely to book a roughly 90
billion yen ($1.16 billion) operating loss for the
April-December period amid eroding memory chip prices.

Out of the 13 Nikkei companies that have reported quarterly
figures so far, nearly 70 percent of them came in below market
expectations, Thomson Reuters StarMine data showed. That
compares with 35 percent of S&P 500 companies.
Although Japan's corporate earnings results have been
disappointing so far, the pace of deterioration of the Topix's
earnings momentum -- analysts' upgrades minus downgrades as a
precentage of total estimates -- moderated to minus 4.8 percent
from December's minus 8.1 percent, Thomson Reuters I/B/E/S data
showed, signalling a less gloomy outlook for companies.
"We are looking at a market here in Tokyo with 71 percent of
stocks trading below book and with half of stocks trading below
five times EV/EBITDA ... You are practically giving away stocks
in Japan," said Nicholas Smith, Japan strategist at CLSA.
"It's amazing that there is a breath of decent news (U.S.
economic indicators) and Tokyo is not up more."
Komatsu Ltd gained 1.5 percent after U.S. peer
Caterpillar reported a 58 percent rise in quarterly
earnings on record sales of construction and mining equipment,
and forecast strong growth for this year.