Japan stocks dip as weak data weighs on sentiment

(Adds stocks, details)

By Aiko Hayashi

TOKYO, March 5 (Reuters) - Japanese stocks dipped in see-saw trade on Wednesday as worse-than-expected company spending data dampened investor confidence about the health of the domestic economy, hitting machinery makers and offsetting a jump by Fast Retailing Co Ltd (9983.T: Quote, Profile, Research, Stock Buzz) on an upbeat earnings outlook.

Financial shares such as Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) fell amid growing worries about domestic demand and lingering global credit market jitters.

"Investors reconfirmed uncertainty over the domestic economic outlook after the weak company capital spending data, which indicated the possibility of a downward revision to GDP," said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

Japanese companies cut spending on plant and equipment more than expected in the final quarter of 2007 compared with a year earlier, pointing to a downward revision to GDP and underlining views that the Bank of Japan will leave interest rates on hold for some time. [ID:nT231998]

"But without any factors for buying or selling, the market will likely hover around 13,000, helped somewhat by the stabilising currency trading at mid-103 yen against the dollar," Miura said.

The benchmark Nikkei average .N225 was down 0.2 percent or 27.87 points at 12,964.41 after moving in and out of negative territory throughout the morning session.

The broader TOPIX index was down 0.4 percent or 5.22 points at 1,260.44.