UPDATE 3-Takeda holds forecast, drugs outlook still tough

* Q2 recurring profit rises 9 pct to 117.3 bln yen

* Keeps FY recurring profit forecast at 400 bln yen

* Tough sales in markets, falling sales in flagship drugs

* Shares up 3.4 pct, vs Nikkei gain of 1.5 pct (Adds Takeda president's comments, more details)

By Yumiko Nishitani

TOKYO, Oct 30 (Reuters) - Takeda Pharmaceutical, Japan's top drugmaker, kept its full-year profit outlook unchanged despite larger-than-forecast first half earnings, as it expects yen strength and weak sales to dull the impact of cost cuts.

Takeda (4502.T), which earns about half its revenues overseas, saw second-quarter sales hurt by a firm local currency, weak global economy and intensified competition.

In contrast, the underlying drug businesses at Japan's third- and fourth-largest drugmakers, Daiichi Sankyo (4568.T) and Eisai (4523.T), showed relative strength in the second quarter, featuring growth at home and in mainstay drugs.

Daiichi, which owns a majority of India's Ranbaxy Laboratories (RANB.BO), more than doubled its quarterly recurring profit, thanks to the strong sales of its mainstay high blood pressure drug and Ranbaxy's contribution.

Takeda suffered from tough sales conditions in Japan and the United States, its two main markets, in the second quarter and failed to deliver the six-month sales it projected, it said.

"In Japan, our market share fell slightly as overall demand growth centred on influenza and cancer treatments. We do not make any influenza drug and have only six rather old cancer drugs which faced tough competition with newer rivals," Takeda president Yasuchika Hasegawa told a news conference.

He added that he was confident that Takeda could turn around its domestic market share next business year by launching several new drugs but did not expand on what these new drugs were.

In the United States, the poor state of the economy and a delay in the launch of new products, as well as the strong yen, pressured Takeda's sales. Hasegawa said Takeda's U.S. sales in the July-August period were weak but saw a modest recovery in September.

"However, it remains uncertain whether recovery will continue," he said.

In the year ahead, Takeda may be further hurt by declining sales in its flagship drugs, analysts said.

"Takeda's sales may drop from next year on as patents of some drugs will expire and most investors are wondering how Takeda will deal with the problem. And I can not see any answer from these results." said Kenji Masuzoe, a drug sector analyst at Deutsche Bank.