Nikkei hits 6-wk low as tech stocks fall, JVC down

TOKYO, July 25 (Reuters) Japan's Nikkei average fell to its lowest in six weeks on Wednesday, with high-tech shares such as Canon Inc.

leading losses on a tumble in U.S. stocks and a stronger yen.

Shares of Victor Co. of Japan Ltd. (JVC) and Kenwood Corp.

fell after news that Japanese electronics maker Kenwood and asset manager Sparx Group will buy a combined stake of about 30 percent in JVC in a 1 million deal that will take loss-making JVC off the consolidated accounts of Matsushita Electric Industrial ''A drop in the U.S. market is negatively impacting Japanese stocks a great deal as the market here lacks trade factors before an election this weekend,'' said Hiroaki Kuramochi, managing director at Bear Stearns.

''And 18,000 could become a wall for the Nikkei, if the yen continues to strengthen and U.S. stocks keep falling.'' Still, Kuramochi said the Nikkei's bottom will likely be around the 17,750 level on Wednesday as it is not domestic factors that are mainly bringing down the market.

The Nikkei was down 1.37 percent or 246.35 points at 17,755.68 as of 0051 GMT, the lowest since June 13.

The broader TOPIX index lost 1.42 percent to 1,741.00.

The dollar recovered against the yen to 120.25 yen after hitting 119.89 yen, the lowest since mid-May.

Half the seats in the upper house of Japan's parliament are up for grabs in the July 29 poll, with the ruling Liberal Democratic Party seen faring poorly after funding scandals and voter anger over lost pension records.

Shares of JVC tumbled 9.5 percent to 345 yen, while Kenwood fell 0.6 percent to 177 yen.

Elsewhere, Mitsukoshi Ltd. jumped 9.7 percent to 599 yen and Isetan Co. Ltd. added 1.7 percent to 1,933 yen after a source familiar with the matter told Reuters on Wednesday that Japan's fourth- and fifth-largest department stores are in talks on a capital alliance.

Canon was down 2.4 percent at 7,020 yen.

REUTERS CS PM0700