UPDATE 3-Canon Q2 drops 12 pct on strong yen, slow copier sales

(Adds asset manager comments, details)

By Kiyoshi Takenaka

TOKYO, July 24 (Reuters) - Japanese camera and office equipment maker Canon Inc posted a 12 percent fall in quarterly profit due to sluggish copier demand and a stronger yen, but kept its forecast for a ninth straight year of earnings growth.

Canon (7751.T: Quote, Profile, Research, Stock Buzz) has enjoyed brisk demand for high-end cameras but profitability at its office equipment operations has come under pressure with businesses putting off buying or replacing copiers as the global economy slows.

The company, which competes with Xerox Corp (XRX.N: Quote, Profile, Research, Stock Buzz), Ricoh Co Ltd (7752.T: Quote, Profile, Research, Stock Buzz) and Konica Minolta Holdings Inc (4902.T: Quote, Profile, Research, Stock Buzz) in printers and copiers, is also grappling with the soaring cost of raw materials and the profit-slicing impact of a firmer yen.

"We expect the yen to remain strong and for high raw materials and fuel prices to continue. The operating environment is tougher than we had originally thought," Canon Managing Director Masahiro Osawa told a news conference.

Canon said its operating profit dropped to 160.15 billion yen ($1.48 billion) in the April-June quarter from 181.47 billion yen a year earlier. Net profit fell 13 percent to 107.84 billion yen on sales of 1.11 trillion yen, down 1.9 percent.

Osawa said demand was slow in North America for its office equipment, copiers in particular, and weakness was spreading to Europe.

"The slowdown in the United States is starting to affect Europe, although we still holds high hopes for emerging markets such as Russia, the Middle East and Eastern Europe," he said.