RPT-Nikkei sags on global economy worry, stronger yen

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*Nikkei set for 10th days of losses, longest since 1965

*Trading houses sold as investors lock in recent profits

*Shippers extend losses

By Elaine Lies

TOKYO, July 2 (Reuters) - Japan's Nikkei average fell 1 percent on Wednesday, heading for its longest losing streak in more than 40 years as worries about the global economy intensified, with Canon Inc (7751.T) and other exporters hurt by a stronger yen.

Shippers extended recent losses on concerns that the sector could fall further, while trading houses that had seen recent sharp gains on high oil prices slid as investors locked in profits.

The fall took some in the market by surprise, as the benchmark Nikkei .N225 opened higher and had been predicted to rise after U.S. stocks gained on Tuesday.

"Though Wall Street rose yesterday, the fundamental problems with the U.S. economy remain, and it's hard to imagine that we'll see a rebound after U.S. jobs data comes out on Thursday," said Norihiro Fujito, general manager at Mitsubishi UFJ Securities.

"The economies of a lot of emerging markets, which Japan counted on even if the U.S. was doing poorly, are now being hit as well. This slowing, and inflation, may have a delayed impact on Japan but an impact is unavoidable," he said.

Signs of an economic slowdown in emerging markets, key for Japan's export-oriented economy, have dented investor sentiment.

"People are growing so nervous now that they're selling on the slightest of worries," said Fujio Ando, senior managing director at Chibagin Asset Management.

One of the biggest negative factors remained oil, which on Wednesday rose above $142 Clc1 per barrel and was at $142.26 by 0204 GMT.

But trading houses and energy firms, which were boosted earlier this week by oil's surge and helped to slow the Nikkei's slide, slipped as investors took profits.

The benchmark Nikkei .N225 was down 0.97 percent at 13,331.98, heading for its 10th straight negative day and its longest losing streak since early 1965.

The broader Topix was down 1.1 percent at 1,305.60 after coming close to slipping below 1,300 for the first time since April 23.