Japan stocks dip on financials; resources support

(Updates to midmorning)

TOKYO, April 15 (Reuters) - Japan's Nikkei stock average dipped 0.2 percent on Tuesday, building on a two-week closing low hit the previous day as worries about financials hurt the sector, but resource-related shares such as trading house Mitsui Co Ltd (8031.T) helped support the market after oil marked a record closing high.

Wachovia Corp WB.N, the No.4 U.S. bank, said on Monday that it would cut its dividend, eliminate jobs and raise capital of $7 billion after becoming the latest casualty of the global credit crunch. [ID:nN14343221]

"After the news about Wachovia, investors couldn't actively buy financials, but they now appear somewhat willing to buy on dips as they are factoring in weak results from the sector," said Zenshiro Mizuno, a senior managing director of the equity trading division at Marusan Securities.

"Still, trade will likely be quiet as investors want to see results from banks such as Citigroup."

The rocky ride for the U.S. stock market is expected to continue this week, with earnings reports from JPMorgan Chase (JPM.N), Merrill Lynch MER.N, Citigroup (C.N) and other large banks and financial services companies, as well as reams of economic data.

The benchmark Nikkei average .N225 fell 19.24 points to 12,898.27 as of 0028 GMT. It fell 3.1 percent on Monday to book its lowest close since April 1.

The broader TOPIX index inched lower by 0.3 percent or 3.71 points to 1,242.53.

Japan's financial shares slid after nagging concerns about bank profits hit U.S. peers.

Top lender Mitsubishi UFJ Financial Group (8306.T) declined 1.2 percent to 916 yen, No.2 Mizuho Financial Group (8411.T) fell 1.7 percent to 407,000 yen and Sumitomo Mitsui Financial Group (8316.T), the third-biggest bank, shed 0.4 percent to 698,000 yen.

Further dampening sentiment, Goldman Sachs (GS.N) said in a note that the quarterly U.S. earnings season, which is just starting, looks "awful" and is expected to send U.S. stocks lower in the weeks ahead.

Resources-related shares jumped after oil prices CLc1 rose to a record close on Monday on a weaker dollar and supply disruptions ahead of the U.S. summer gasoline season.

Mitsui rose 1.9 percent at 2,455 yen, while Mitsubishi Corp (8058.T) climbed 2 percent to 3,580 yen and Itochu Corp (8001.T) gained 3.1 percent to 1,130 yen. (Reporting by Aiko Hayashi; Editing by Brent Kininmont)