Nikkei falls 1.4 pct as Casio hit by forecast

TOKYO, May 11 (Reuters) The Nikkei average fell 1.37 percent on Friday, weighed down by Casio Computer's fall on a weaker-than-expected forecast and broker downgrades, and investors took profits in recent gainers such as exporters due to growing concerns about the U.S. economic outlook.

Shares of property firms such as Mitsubishi Estate Co. Ltd. that had risen on earnings hopes also lost ground.

Tsuyoshi Segawa, an equity strategist at Shinko Securities, said investors appeared eager to see how Chinese markets open following the Bank of England's rate hikes and growing concern about the U.S.

economic outlook.

The Shanghai Composite Index was down 0.83 percent as of 0245 GMT.

''On top of the fact that investors were already cautious before another peak of earnings announcements next week, it is unavoidable for Japanese stocks to fall on U.S. stocks,'' he said.

British interest rates hit a 6-year high of 5.5 percent on Thursday and could rise further still as the Bank of England tries to rein in inflation, now at its highest level in more than a decade.

''Investors still remember the February global market sell-off was sparked by policies to suppress an overheated economy in China,'' Segawa said.

The Nikkei finished the morning down 243.63 points at 17,493.33, and the broad TOPIX index shed 1.32 percent to 1,714.03.

Trade was active with 1.2 billion shares changing hands on the exchange's first section. Declining shares beat advancers by a ratio of more than seven to one.

CASIO DOWN, PROPERTY FIRMS FALL Casio Computer plunged 16.1 percent to 2,035 yen, becoming the biggest percentage loser on the Tokyo bourse's first section.

Casio posted an 11.5 percent rise in annual operating profit after the market closed on Thursday. But a forecast by the world's 9th-largest digital camera maker of a profit of 53 billion yen (2.3 million) for the business year to March 2008 was far below a consensus of 62 billion yen in a poll of 16 analysts by Reuters Estimates.

JP Morgan downgraded Casio to ''Neutral'' from ''Overweight'' and lowered its price target to 2,500 yen from 2,425 yen. Other brokerage firms including Mizuho Securities also downgraded Casio.

Exporters fell with Canon Inc. down 2 percent at 6,900 yen.

Among real estate companies, Mitsubishi Estate declined 2.8 percent to 3,800 yen, and Sumitomo Realty&Development Co. Ltd. fell 2.1 percent to 4,690 yen.

Office equipment maker Konica Minolta Holdings Inc. fell 7.2 percent to 1,582 yen as Mizuho Securities cut its rating on the stock by one notch to ''3'', saying its share price had reached the brokerage's target.

Among gainers, Yokohama Rubber Co. Ltd. rose 2.8 percent to 799 yen after the Nikkei business daily reported the auto tyre maker will increase production capacity at its tyre plants in Japan and Thailand to produce more value-added products.

Ishikawajima-Harima Heavy Industries Co. Ltd. gained 2.3 percent to 491 yen after the Nikkei newspaper reported the company will restart operations of its shipbuilding plant in central Japan, as ocean transport of raw materials and products has been expanding led by growing demand from China.

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