Nikkei flat Canon down, but trade houses gain

TOKYO, June 6 (Reuters) The Nikkei was almost flat on Wednesday with a broad range of recent gainers including exporters such as Canon Inc. down after comments from U.S. Federal Reserve Chairman Ben Bernanke dashed hopes for an interest rate cut this year in Japan's top export market.

But the market got support from shares in trading houses after the Nikkei business daily reported on Wednesday Marubeni Corp. plans to invest in a power generation and water conversion project in the United Arab Emirates.

''Investors are locking in profits after U.S. stocks fell, but sell orders placed by foreigners for companies with high profitability are supporting the market,'' said Hiroaki Kuramochi, managing director at Bear Stearns.

Bernanke said on Tuesday that the ailing U.S. housing market will continue to be a drag on economic growth.

Kuramochi also said the Japanese market continues watching Chinese stocks closely as it lacks domestic events for trade.

''Investors watch China stocks as the overall Japanese market could come under pressure if Chinese stocks fall,'' he said.

The Nikkei was down 0.08 percent, or 15.09 points, at 18,038.72 as of 0049 GMT, while the broader TOPIX index inched up 0.05 percent to 1,777.44.

Shares in Marubeni jumped 5.9 percent to 946 yen.

Gains in Marubeni also helped shares of other trading firms, with Itochu Corp. up 2.8 percent at 1,433 yen and Sumitomo Corp.

gaining 3.5 percent to 2,360 yen.

Reuters reported in April that an alliance of Britain's International Power and Marubeni made the lowest bid in a $3 billion seawater desalination and power project in the UAE.

Among stocks that were sold, recent gainers Advantest Corp.

lost 1.7 percent to 5,310 yen and Canon shed 0.8 percent to 7,130 yen.

Shares of Rakuten Inc., an online shopping mall operator, fell 1.1 percent to 40,150 yen after Japan's financial market watchdog called for disciplinary action against its brokerage unit for recurring system problems.

REUTERS JK BST0708