Nikkei down 0.1% as tech falls offset bank gains
* Nikkei pares losses after opening lower
* Index heavyweight Fast Retailing rises ahead of earnings
* Investors not seeing feared jump in oil prices (Adds stocks and comments)
TOKYO, July 10 (Reuters) - The Nikkei stock average shook off most of its earlier losses to end morning trade down 0.1 percent on Thursday, with gains by banks offsetting declines in high-tech firms such as Canon Inc (7751.T).
Fast Retailing Co (9983.T) climbed 3 percent after Credit Suisse forecast solid earnings when the casual clothing retailer releases third-quarter results after the close.
The market opened lower following steep losses on Wall Street, but it reversed direction and briefly moved into positive territory as a feared jump in oil prices didn't materialise after news of an Iran missile test on Wednesday.
"Oil prices ended little changed yesterday. It provided a relief to investors," said Noritsugu Hirakawa, strategist at Okasan Securities. "And technicals suggest Japanese stocks have been oversold."
He and other market analysts said trading in connection with settlement of index options on Friday was also providing a floor for the Nikkei as some options traders were trying to keep the Nikkei at around 13,000.
The benchmark Nikkei .N225 ended the morning down 12.64 points at 13,039.49. The broader Topix dipped 0.1 percent to 1,284.91.
Bank shares were firm, with top lender Mitsubishi UFJ Financial Group (8306.T) rising 1.8 percent to 972 yen while No.2 Mizuho Financial Group (8411.T) gained 0.6 percent to 515,000 yen.
"Japanese stocks are chosen for passive reasons. Japanese banks are seen relatively distant from the credit problems U.S. and European rivals are suffering," said Yasuhiro Miyata, senior portfolio manager at asset management firm Diam.
"Also among Asian markets, Japan's economic and political situations are considered relatively stable," he said
U.S. stocks tumbled on Wednesday, dragging the S&P 500 into a bear market, as worries about more credit-related losses hurt financial companies and Cisco Systems (CSCO.O) led technology shares lower after its CEO raised fears of an extended economic downturn.
FAST RETAILING UP
Fast Retailing, operator of the Uniqlo casual clothing chain, rose to 10,070 yen, becoming the biggest positive contributor to the Nikkei.
Credit Suisse analyst Dairo Murata wrote in a note to clients that he expects Fast Retailing's second half earnings to maintain the strength seen in the first half.
"... with major retailers in general experiencing sluggish earnings, the market may again look positively at FR's exceptionally solid results," he wrote.
Digital camera maker Canon fell 1.9 percent to 5,160 yen, one of the biggest drags on the Nikkei.
GS Yuasa Corp (6674.T) rose 2 percent to 452 yen after the Nikkei business daily said Mitsubishi Motors Corp (7211.T) will start selling electric cars to retail customers next year, a year ahead of schedule, as it sees opportunities for these cars amid surging gasoline prices.
GS Yuasa, Asia's biggest car battery maker, has set up a joint venture with Mitsubishi Motors and Mitsubishi Corp (8058.T) to produce lithium-ion batteries for electric cars.
Mitsubishi Motors rose 0.5 percent to 188 yen, while Mitsubishi Corp fell 1.9 percent to 3,140 yen.
Trade picked up on the Tokyo exchange's first section, with 984 million shares changing hands, above last week's morning average of 900 million.
Declining stocks outpaced advancing ones by 834 to 721.
