Nikkei slips 0.3 pct after two-day rally

TOKYO, Apr 5 (Reuters) The Nikkei slipped 0.30 percent on Thursday following a two-day rise, with Fast Retailing Co. Ltd.

and other recent gainers dropping and lower oil prices weighing on energy stocks such as Nippon Oil Corp.

Nintendo Co. Ltd. rose after it raised its sales and profit forecasts for the business year just ended for the fourth time on Thursday, citing robust demand for its DS handheld games.

Some said foreign investors, who account for nearly half of the Tokyo market's overall trades, appear to have been less active in the market, failing to support the market advances.

The government data showed on Thursday that foreign investors bought a net 31.2 billion yen of Japanese stocks last week.

''There may be expectations that foreign investors may refrain from buying Japanese stocks ahead of the Easter holiday,'' Kenichi Azuma, equity strategist at Cosmo Securities Co. Ltd.

The Nikkei fell 52.67 points to 17,491.42. The benchmark had booked more than 500 points in the last two sessions and saw its highest close since Feb. 28 on Wednesday.

The TOPIX was down 0.57 percent at 1,720.72.

Ahead of corporate earnings toward the end of this month, all eyes will be on earnings outlooks, said Takashi Kamiya, chief economist at T&D Asset Management.

''Mergers and acquisitions are supposed to be a major theme for the stock market this year, but that does not mean anything if earnings are bad,'' he said.

Trade was relatively active, with 2.14 billion shares changing hands on the Tokyo exchange's first section. Declining shares beat advancers, 967 to 625.

PARING WEDNESDAY'S GAINS Clothing store operator Fast Retailing dropped 0.9 percent to 9,280 yen after jumping nearly 7 percent in the previous session.

NGK Insulators Ltd., a top-ranked maker of insulators for power utilities, dropped 4.2 percent, following a 9 percent surge on Wednesday.

Nippon Oil fell 3.4 percent after U.S. crude oil futures ended lower on Wednesday.

Nintendo rose 2.1 percent to 34,350 yen on better forecasts.

Nippon Steel Corp. dropped 3.2 percent and other steel stocks also came under profit-taking pressure after the sector closed the fiscal year to March as the second-best performer.

The Bank of Japan's tankan business sentiment survey this week showed that steel companies were less optimistic about their future business conditions and the stocks lost impetus, leaving the market directionless, said Hideyuki Suzuki, investment information manager at SBI Securities.

REUTERS PV KP1355