Nikkei flat in thin trade, Fanuc up but Canon dips

TOKYO, Dec 26 (Reuters) The Nikkei share average was little changed in slow trade on Tuesday as a gain by Fanuc Ltd. was offset by falls in Canon Inc. and some other recent gainers.

With foreign buyers absent for holidays, local investors locked in profits on recent advancers. But losses were limited as data released on Tuesday failed to dispel doubts about whether the Bank of Japan will raise interest rates next month, sending the yen to a two-month low against the dollar and raising hopes for an upward revision of Japanese exporters' earnings.

''Given receding expectations for an interest rate rise, the yen is unlikely to rise much from the current level by the end of March, paving the way for exporters to raise their earnings forecasts for the current business year,'' said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Japan's core consumer price index rose 0.2 percent in November from a year earlier, in line with market expectations, while all-households spending fell 0.7 percent in November, smaller than the expected decline of 1.3 percent.

After the data, the dollar hit a two-month high of 119.00 yen on electronic trading platform EBS on Tuesday.

A weak yen is a boon for Japanese exporters as it boosts profits when earnings from abroad are brought home.

The Nikkei was up 1.51 points or 0.01 percent at 17,094.40 at 0450 GMT, while the broader TOPIX index was down 0.05 percent at 1,664.04.

With trade volume thinned by the absence of foreign investors, some domestic participants were focusing on small-cap markets.

''When volume is thin ... small-caps are really the only thing that move,'' said Ken Masuda, senior dealer in equities at Shinko Securities.

The Nikkei Jasdaq declined 0.24 percent to 2,107.68, while the Mothers market for start-ups added 0.18 percent to 1,122.00.

Fanuc, a maker of industrial robots, rose 1 percent to 11,770 yen, becoming one of the biggest positive contributors to the Nikkei.

But some exporters, such as Canon, trimmed recent gains. Canon fell 1.6 percent to 6,650 yen. Likewise, Honda Motor Co. Ltd.

declined 0.9 percent to 4,560 yen.

Sharp Corp. gained 1.5 percent to 2,075 yen after the Nihon Keizai business daily reported on Tuesday that the electronics maker plans to invest about 5 billion yen ( million) to build a new plant in Mexico to assemble liquid crystal display televisions for the North American market.

Game maker Tomy Co. Ltd. jumped 3.5 percent to 824 yen after the company said it would invest 3 billion yen ( million) to buy 500,000 preferred shares in Akachan Honpo, a baby clothing chain store operator.

REUTERS CS GC130