Nikkei flat in thin trade, some laggards rise

TOKYO, Aug 2 (Reuters) The Nikkei was little changed in thin trade on Wednesday as shares of Advantest Corp. edged higher, while exporters such as Fanuc Ltd. fell due to concerns about higher U.S.

interest rates.

Even as concerns about inflation in the key U.S. market weighed on Japanese exporters, investors were shifting funds into stocks seen as laggards, said Takashi Ushio, head of the investment strategy division at Marusan Securities.

''There are still some worries about higher U.S. interest rates,'' he said.

''But this is very much a market where investors are searching for bargains,'' Ushio said.

Thin trading volume was also helping to keep the Nikkei range-bound, he said.

A U.S. government report on Tuesday showed that a key inflation measure rose in June, while a separate survey showed that prices paid by manufacturers hit a nine-month high in July.

Higher U.S. interest rates are seen as a negative for Tokyo stocks, as they crimp consumer spending in a key market for Japanese goods.

The Nikkei average was down 9.58 points at 15,431.33 as of 0509 GMT.

The TOPIX index was down 0.05 percent at 1,566.30.

Chip-gear maker Advantest rose for the first time in four sessions, adding 0.7 percent to 10,960 yen and becoming the Nikkei's biggest positive contributor.

But some exporters, such as Fanuc Ltd., declined. The maker of industrial robots lost 2.3 percent to 9,300 yen.

Hitachi Ltd., Japan's biggest industrial electronics maker, fell 3.5 percent to 693 yen. The Nihon Keizai business daily said on Wednesday that power company Chubu Electric Power Co. plans to seek more than 100 billion yen (0 million) in damages from the electronics firm, claiming a Hitachi turbine was to blame for a shutdown at one of its nuclear plants.

Askul Corp. jumped 16.6 percent to 2,140 yen, hitting its daily limit and becoming the biggest percentage gainer PG.on the Tokyo exchange's first section.

Brokerage Merrill Lynch on Monday started coverage of the retailer with a ''buy'' rating and a target share price of 2,600 yen.

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