* Factory data offsets positive mood after S&P's record rise * Sentiment remains bright for new fiscal year - analysts * Panasonic falls on disappointment over no job cuts By Ayai Tomisawa TOKYO, March 29 (Reuters) - Japan's Nikkei share average eased on Friday morning as worse-than-expected factory output data offset positive sentiment triggered by the U.S. S&P 500 hitting a record high, while trading was subdued on the last business day of the fiscal year. The Nikkei opened higher, but fell 0.1 percent to 12,325.34 in mid-morning trade. Japan's industrial production unexpectedly fell 0.1 percent in February from the previous month, government data showed, compared with a median market forecast for a 2.6 percent rise. The Topix dropped 0.3 percent to 1,033.41. "The data is hurting sentiment, although the impact should be limited and it may not last long," said Yutaka Miura, a senior technical analyst at Mizuho Securities. He added that despite poor factory data, production is seen recovering in the future amid a pick-up in corporate investment. Analysts said trading could be uneven while major foreign markets were closed for Good Friday, but sentiment would brighten next week with the April 1 start of the new year. Worries about the European debt crisis receded as banks in Cyprus reopened to relative calm on Thursday following the country's controversial bailout that taxed large depositors. In Wall Street, the S&P 500 set a record closing high. "Investors' risk-off stance has receded," said Yoshiyuki Kondo, an analyst at Daiwa Securities, but he added that investors may not build large positions before the weekend and on the last trading day. Nikon Corp gained 1.6 percent and Nissan Motor Co added 0.4 percent. However, Panasonic Corp fell 3.4 percent after the consumer electronics maker disappointed some investors by not announcing job cuts in its medium-term business blueprint. The Bank Of Japan's quarterly tankan survey of corporate sentiment is due out on Monday, while the central bank's first policy meeting under its new leadership will be held April 3-4. BOJ Governor Haruhiko Kuroda said on Thursday that the central bank would consider buying longer-dated Japanese government bonds and other risk assets, and would continue monetary easing until its 2 percent inflation target is achieved.