Nikkei pares losses, but economic woes weigh

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By Elaine Lies

TOKYO, April 10 (Reuters) - Japan's benchmark Nikkei was down 0.59 percent on Thursday as worries about the U.S. and Japanese economies grew ahead of earnings results, with industrial robot maker Fanuc Ltd (6954.T: Quote, Profile, Research, Stock Buzz) hit by the double punch of sagging machinery orders and a weaker yen.

All Nippon Airlines (ANA) (9202.T: Quote, Profile, Research, Stock Buzz) and Japan Airlines Corp (JAL) (9205.T: Quote, Profile, Research, Stock Buzz) fell after Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) said there would be a third major delay in the delivery of the new Boeing 787 Dreamliner plane. [ID:nN09455655]

U.S. stocks fell on Wednesday after United Parcel Service Inc (UPS.N: Quote, Profile, Research, Stock Buzz), seen as a bellwether of U.S. economic activity, slashed its earnings forecast, further stoking fears about the economy there and casting a shadow over Japanese earnings as well. Rising materials prices, as exemplified by Nippon Steel Corp's (5401.T: Quote, Profile, Research, Stock Buzz) announcement on Wednesday it would pay BHP Billiton Mitsubishi Alliance (BMA) triple what it paid the world's top coking coal producer last year, and a strong yen may hit Japanese balance sheets hard, market players said.

"Everyone said that poor results and poor forecasts were factored in when the market hit its year low last month, but this sort of price rise hadn't even been thought of then," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

"This is likely to affect a lot of shares, and worries about this have been causing the market to weaken the last few days." Seven & I Holdings Co Ltd (3382.T: Quote, Profile, Research, Stock Buzz) is due to announce full-year results later on Thursday. Aeon Co Ltd (8267.T: Quote, Profile, Research, Stock Buzz) on Monday posted its first profit fall in a decade, raising fears about the rest of the sector and the market as a whole.

"UPS slashing its forecast has really sparked fears about the U.S. economy, and this is carrying over to Japan as our earnings season moves into higher gear," said Kazuki Miyazawa, an analyst at Daiwa Securities SMBC.

"There's a lot of concern about what these are going to say about our economy."