Nikkei climbs after 2 days of decline, output jitters weigh

 * Yen weakness fails to give exporters much of a lift
 * Near-term outlook bearish, investor jittery about lost
output
 * Toshiba down 1.3 pct as Macquarie cuts price target
 * Tokyo Electric up 1.2 pct in volatile trade
 By Chikafumi Hodo and Antoni Slodkowski	
 TOKYO, April 7 (Reuters) - Japan's Nikkei average rose 0.6
percent after two days of decline but market players said the
near-term outlook remained bearish due to concerns about lost
production for manufacturers since last month's massive
earthquake and worries about the nuclear crisis.	
  The slight rise for the benchmark index comes despite a
recent slide in the Japanese currency to near an 11-month low of
122.55 yen to the euro and a half-year low of 85.54
yen against the dollar .	
  The Nikkei has regained more than half the losses 	
it posted since the March 11 devastating earthquake and tsunami 	
but market players said the rebound driven mainly by foreign 	
investors may have run its course.  	
 "The limited gains for the Nikkei despite rapid weakness in
the yen, are a clear illustration of the cautious mood building
in the market as there is little clarity about the situation of
many manufacturers," said Ryosuke Okazaki, chief investment
officer at ITC Investment Partners.	
 "Japanese shares will be under pressure on production
worries, but it's early to be overly pessimistic. From here on,
investors will be taking a close look at each manufacturer to
see how they are coping with the situation."	
 The benchmark Nikkei average closed the morning
session up 55.06 points at 9,639.43. It briefly rose 1.1 percent
to an intraday high of 9,687.18.	
 The broader Topix index rose 0.7 percent, or 5.92
points, to 845.53. 	
 Strength in overseas markets the previous day led investors
covering short positions after the Nikkei posted losses for the
previous two days.	
 "It was about time to see some corrective buying, with
investors who have gone short this week covering their positions
ahead of tomorrow's SQ," said Takashi Ohba, a senior strategist
at Okasan Securities, referring to Friday's settlement of 
options, known in Japan as the special quotation.	
 "But today's buying is largely technical with investors
trying to square off their positions. Many players want to keep
their positions as neutral as possible because there are many
uncertainties, and the market is more likely to test the
downside."	
 Foreign investors were net buyers of Japanese stocks last
week, and local market participants were keen to see if they
would continue to buy them in the longer run.	
 "I think foreigners will continue to be eager to buy
Japanese shares on dips, but I doubt that they'll be aggressive
about buying them on rallies at a time when there are many
uncertainties in the market," Okasan's Ohba said.	
 Overseas investors shifted back to net buying of Japanese
equities to the tune of 144.7 billion yen ($1.69 billion) in the
week to April 2, after having sold a net 13.2 billion yen the
prior week, according to data by the Ministry of Finance.	
 Between March 13 and 19, the week right after the quake and
tsunami, foreigners logged record net buying of Japanese
equities of more than 890 billion yen. 	
 	
 TOSHIBA DOWN	
 Shares in electronics conglomerate Toshiba Corp , 
slipped 1.3 percent to 385 yen by the morning close after
Macquarie Securities cut the firm's target share price to 500
yen from 575 yen after the shares took a hit as the nuclear
crisis in Fukushima unfolded, but kept its "outperform" rating.	
 "We believe that Toshiba's shares have been hit more by an
adverse turn in sentiment surrounding the nuclear-related
business due to the Fukushima incident, than by any fundamental
deterioration in its business," the brokerage's Damian Thong
said in a note to clients.	
 Toshiba is among the 10 biggest post-quake losers out of the
225 Nikkei components, shedding some 23 percent since March 10
-- the day before the quake -- and underperforming the benchmark
index, which after three weeks since the disaster still hovers
7.7 percent below its early March levels.	
 Shares in Tokyo Electric ended the morning up 1.2
percent at 341 yen after rising as much as 5.3 percent to 355
yen at one point in a volatile trade. 	
 TEPCO shares fell to a record low of 292 yen on Wednesday
due to concerns that it was likely to face huge damages payments
over the crisis at its stricken Fukushima power plant.	
 Engineers pumped nitrogen gas into a crippled nuclear
reactor at the plant on Thursday, trying to prevent an explosive
buildup of hydrogen gas. [ID:nL3E7F62A5]	
 Elsewhere, Elpida Memory gained 5.6 percent to
1,122 yen after the company said it had developed a 4-gigabit
DRAM chip for smart phones, joining bigger rival Samsung
Electronics as the only producers of the large
capacity power-saving memory chip for smart phones.
[ID:nL3E7F63HD]	
 	
	
 

Nikkei climbs after 2 days of decline, output jitters weigh