Nikkei falls 1.2 pct, U.S. auto bailout eyed

(Updates to midmorning)

By Aiko Hayashi

TOKYO, Dec 11 (Reuters) - Japan's Nikkei average slipped 1.2 percent on Thursday, losing some gains made the previous day on a stronger yen and as uncertainty over quick approval for U.S. auto rescue plans pressured recent gainers such as Advantest (6857.T).

But some big stocks bucked the trend, with Sumitomo Mitsui Financial Group (8316.T) climbing after a report that it would raise $7.6 billion in capital, much more than earlier plans, while Japan Tobacco Inc (2914.T) jumped on a report that the tobacco tax would not be hiked.

"Japanese stocks had already priced in gains on Wall Street yesterday and investors are discouraged by the yen that has firmed since around the market open," said Yutaka Miura, a senior technical analyst at Shinko Securities.

"Investors also want see how the U.S. auto industry bailout pans out, with approval by the Senate looking a bit uncertain."

The benchmark Nikkei .N225 fell 99.42 points to 8,560.82, although it was still above its 25-day moving average. It gained over 3 percent the previous day to book its highest close since Nov. 12.

The broader Topix shed 0.6 percent to 829.21.

U.S. stocks rose in a choppy session on Wednesday, with the Dow Jones industrial average .DJI ending up 0.8 percent.

In New York on Wednesday, the dollar added 0.6 percent to 92.64 yen JPY=. It was trading around 92.60 yen on Thursday. Investors fret over a stronger yen as it curbs Japanese exporters' overseas profits when they are repatriated.

U.S. lawmakers opened debate on Wednesday on legislation to bail out U.S. auto companies. Following debate, a vote on passage in the House of Representatives was expected later in the evening.

But hopes evaporated for quick action by the Senate where Republicans, some of whose votes would be necessary to ensure passage, threatened procedural moves to slow or even block the effort to authorise up to $14 billion in bridge loans. [ID:nN09294627]

Advantest, the world's biggest maker of semiconductor testers, lost 4.6 percent to 1,209 yen, while Canon Inc (7751.T) shed 1.4 percent to 2,730 yen.

Toyota Motor Corp (7203.T) slipped 0.5 percent to 2,915 yen after a Japanese news agency said on Wednesday the world's biggest automaker will cut its global sales plan for 2009 to below 8.7 million vehicles, down at least 10 percent from its previous forecast. [ID:nT56248]

Sumitomo Mitsui Financial Group rose 2.9 percent to 321,000 yen after a report that it would boost its capital raising plans by 75 percent. [ID:nT132266]

Japan Tobacco Inc (2914.T) gained 4.2 percent to 321,000 yen after the Asahi Shimbun newspaper said the government has decided not to raise the tobacco tax, which had been touted as one way to increase government revenue to fund social welfare spending. (Editing by Edwina Gibbs)