Nikkei down 0.7 pct; property off, chipmakers up

TOKYO, June 22 (Reuters) The Nikkei average fell 0.70 percent on Friday as investors took profits in property stocks such as Mitsubishi Estate Co. Ltd. and other stocks dependent on domestic demand after the benchmark finished the previous session at its highest in seven years.

But Shares of chip testing equipment maker Advantest Corp. and other chip shares rose after the Philadelphia Stock Exchange Semiconductor Index jumped 3 percent to its highest since May 2006 on brokerage upgrades of U.S. chip stocks.

''The market started with profit-taking after grabbing its highest close for the year,'' said Zenshiro Mizuno, senior managing director at Marusan Securities.

''Domestic demand-dependent shares are at a disadvantage as the recent trend favours exporters, helped by a softer yen.'' But Mizuno said the benchmark is still generally on the upward move, despite some falls, as it does not appear to be overheated at all.

The Nikkei ended the morning session down 127.50 points at 18,112.80. The benchmark ended Thursday's session up 0.16 percent at 18,240.30, its highest close since May 2000.

The broader TOPIX index lost 1 percent to 1,771.33.

The dollar edged up from late U.S. trade at 123.75 yen after rising as high as 123.77 yen on electronic trading platform EBS earlier in the session, hitting its highest level since December 2002.

A weaker yen is a boon to companies that make the bulk of their sales abroad because it boosts profits when earninclimbed 2 percent to 9,210 yen andDRAM chip maker Elpida Memory Inc. inched up 0.2 percent to 5,730 yen after hitting a five-month high of 5,850 yen.

Elsewhere, eAccess Ltd. jumped 8.3 percent to 79,800 yen after it and Softbank Corp. said on Thursday they were in talks on forming a WiMAX joint venture, looking to pool more funds to launch ultra high-speed Internet access for mobile devices.

Shares of Softbank were down 1.8 percent at 2,770 yen.

Shares of department store Mitsukoshi Ltd. fell 1.5 percent to 601 yen after the Nikkei business daily reported the company would likely post a 49 percent drop in operating profit for the first quarter as store renovations and tough competition hit sales.

REUTERS KK PM0945