Nikkei snaps winning streak, shippers steam higher

(Adds stocks, details)

By Elaine Lies

TOKYO, May 16 (Reuters) - Japan's Nikkei stock average snapped a four-day winning streak on Friday to end down 0.2 percent as investors locked in profits and exporters such as Canon Inc (7751.T) were sold on a slightly stronger yen, but the benchmark still saw its strongest week in 3 months.

Kawasaki Kisen Kaisha Ltd (9107.T) and other shippers buoyed the market, extending gains on continuing demand for iron ore into China that helped push the Baltic Exchange's chief sea freight index .BADI to a record high. Mizuho Financial Group (8411.T) and other banks climbed after Mizuho, Japan's second-largest bank, said it aimed to buy back up to 400 billion yen ($3.8 billion) of its own shares in the current year. But by late trade they had pared gains as profit-taking picked up pace and the market shrugged off unexpectedly strong Japanese first quarter gross domestic product data.

"We had four straight days of rises, so people are taking profits now ahead of the weekend," said Yutaka Miura, senior technical analyst at Shinko Securities, noting that the Nikkei's inability to break above 14,500 could set the stage for some selling next week. "Though we could go higher depending on how Wall Street does tonight, after this week's rises there is a bit of overheating and this is a natural place for some downward adjustment."

Japan's economy unexpectedly picked up pace in the first quarter as exports weathered a U.S downturn, but firms shrank from investment as they braced for slowing global growth and high energy costs to hit the world's No.2 economy. [ID:nT210001]

"The GDP was good, but now there's worries that the next quarter's figures won't be so good, so the market didn't really get a boost from this," said Fujio Ando, senior managing director at Chibagin Asset Management.

The Nikkei .N225 lost 32.26 points to finish at 14,219.48, but still gained 4.1 percent on the week, its best since mid-February. The broader Topix was up 0.2 percent at 1,395.87.

TREND POSITIVE, SHIPPERS STRONG

Though stocks may face some selling pressure next week, the overall trend remains positive, market players said, with investors eager to buy should the Nikkei slide below 14,000.

"Until July we're likely to see an uptrend, since there's a sense that the next quarter of company results may be better than originally predicted due to the dollar's recovery against the yen," Ando added.

A number of major Japanese companies have based their forecasts with the dollar at 100 yen, and even with the afternoon's slight dollar weakening it still remained well above 104 yen JPY=.

Shippers were among Friday's best performers, boosted after the Baltic Exchange's chief sea freight index soared 418 points or 3.93 percent. Continuing massive demand for iron ore in China, strong coal demand in India and rising demand for grain have all contributed to the rise, along with a shortage of double-hulled vessels in demand after a massive oil spill in South Korea late last year, Ando said.

"A lot of ships are being refitted right now, so there's a real shortage of available ships," he added. Kawasaki Kisen rose 4 percent to 1,237 yen, gaining 16 percent on the week. Mitsui OSK Lines Ltd (9104.T) climbed 4.2 percent to 1,647 yen and Nippon Yusen KK (9101.T) rose 3 percent to 1,113 yen.

Exporters slipped in tandem with the dollar, with Canon down 0.4 percent at 5,570 yen and Sony Corp (6758.T) down 2.1 percent at 5,160 yen, becoming one of the larger drags on the Nikkei.

The biggest drag was Mitsumi Electric Co Ltd (6767.T), a comprehensive electric parts manufacturer, which tumbled 10.1 percent to 3,290 yen after it forecast a 33 percent net profit fall on Thursday for the year to March 2009 due to rising energy and raw materials costs, and an unclear outlook for the U.S. economy.

Trade picked up, with 2.28 billion shares changing hands, compared with last week's daily average of 2 billion. Declining shares beat advancing ones by 944 to 656. ($1=104.64 yen) (Reporting by Elaine Lies, Editing by Brent Kininmont)