Nikkei edges up, but wary of jobs data and yen

(Updates to midmorning)

TOKYO, Jan 9 (Reuters) - Japan's Nikkei average edged up 0.1 percent on Friday as investors looked to defensive shares such as home products maker Kao Corp (4452.T) amid renewed worries about the global economy, but activity was limited ahead of key U.S. jobs data.

TDK Corp (6762.T) initially fell and dragged on its peers after the Japanese electronic components maker said it expects to post a record loss this business year due to weak orders and a stronger yen, and will close factories and cut more than 8,000 overseas jobs to reduce costs. [ID:nT360458]

But TDK later rose 1.1 percent to 3,530 yen.

The dollar clawed slightly higher against the yen JPY= to trade around 91.43 yen but remained weak ahead of a government report expected to show the U.S. economy lost more than half a million jobs in December for the second month in a row, pressuring exporters.

"Looking at the yen and the overseas economic situation, we're seeing defensive shares gain a bit -- but only a bit," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

"Given the jobs data and the three-day weekend coming up, investors are unwilling to put out their hands and buy. Trade is likely to remain mostly directionless."

The benchmark Nikkei .N225 rose 12.46 points to 8,888.88 after a buying spate at the open lifted it to 8,956.85, while the broader Topix was flat at 861.10.

Wal-Mart Stores Inc (WMT.N) and other top U.S. retailers delivered disappointing December same-store sales and profit warnings on Thursday, announcing the most dismal holiday shopping season in nearly 40 years and sparking fresh recession concerns [ID:nN08485027]

But Japan's largest retailer, Seven & I Holdings Co Ltd (3382.T), rose 1.5 percent to 2,790 yen after reporting on Thursday a 7.9 percent rise in operating profit for the quarter ended in November and kept its forecast for the year, as its convenience stores attracted thrifty consumers. [ID:nT17399]

Fast Retailing Co Ltd (9983.T), operator of the Uniqlo chain of discount clothing stores, also gained, climbing 2.4 percent to 12,550 yen ahead of the announcement of first-quarter results later on Friday.

But a wave of downward earnings revisions that has hit exporters has now reached the retail sector as shoppers become more concerned about income prospects and job security.

Aeon Co Ltd (8267.T), Seven & I's closest rival, cut its outlook on Wednesday and warned it may post its first annual net loss in seven years, hit by flagging sales, a writedown at U.S. unit Talbots (TLB.N) and accounting changes. [ID:nT366933]

Aeon was down 1.43 percent at 828 yen.

Industrial robot maker Fanuc (6954.T) fell 5.8 percent to 6,330 yen, and Advantest Corp (6857.T) lost 2 percent to 1,410 yen. Kyocera Corp (6971.T), which began the day higher, erased gains to fall 0.6 percent to 6,700 yen.

Canon lost 1 percent to 3,140 yen and Sony Corp (6758.T) edged down by 0.5 percent to 2,195 yen.

However, the losses were balanced by gains in defensive shares such as Kao, which climbed 3.5 percent to 1,670 yen and cosmetics maker Shiseido (4911.T), which rose 1.8 perent to 1,826 yen as investors looked for firms whose earnings may be more resilient in the economic downturn.

Pharmaceutical firms also rose. Shares of Mediceo Paltac Holdings (7459.T), Japan's top drug wholesaler, rose while shares of Alfresa Holdings (2784.T) fell after the Nikkei business daily asid the drug wholesalers would scrap a planned merger after the antimonopoly watchdog demanded they sell off some assets.

Mediceo Paltac rose 2.2 percent to 1,026 yen while Alfresa tumbled 11.4 percent to 3,580 yen. (Reporting by Elaine Lies; Editing by Kim Coghill)