Nikkei rises 0.4 pct on currency intervention threat but gloom lingers

* Fast Retailing, Softbank lend support on brokerage reports

* Yen's gains hurt exporters; Sharp, Sony at 3-decade low

* Printer makers also hit after Lexmark earnings

* Steelmakers sag on poor outlook, downgrades

By Sophie Knight

TOKYO, July 17 (Reuters) - Japan's Nikkei share average rose
on Tuesday after the finance ministry, reacting to the yen
hitting a one-month high against the dollar, warned that it
would intervene if necessary to curb excessive movements in the
currency market.

However, the index was propped up by just a few
heavyweights, while the broader Topix index fell as
investors remained concerned about stuttering global growth
amidst warnings of disappointing first-quarter revenues.

The Nikkei rose 0.4 percent to 8,755.00, reversing an early
loss, after Finance Minister Jun Azumi's warning on intervention
in the currency market. His remarks came as the yen held onto
Monday's one-month high against the dollar and stayed close to
an 11-1/2 year high versus the euro.

"I think the market is adjusting after recent losses and
could have bottomed out as it approaches its 50 percent
retracement of its recent rally," said Yoshihiro Ito, chief
strategist at Okasan Online Securities.

The Nikkei is close to 8,669, where it would have erased
half of its gains between June 4 and July 4.

Heavyweight Fast Retailing Co Ltd lent support to
the index on Tuesday, rising 4.8 percent after Nomura Securities
praised its discount pricing strategy at its Uniqlo stores.
Still, the brokerage maintained its "neutral" rating for the
retailer, warning that only an increase in sales would warrant a
reassessment.

Domestic defensive favourite Softbank also propped
up the benchmark index, advancing 1 percent to a one-year high
after Goldman Sachs hiked its target price to 3,550 yen from
3,000 yen. The brokerage also lifted its operating profit
forecasts for Softbank's fiscal 2013-2015, identifying the
introduction of the iPhone 5 as a potential upside factor for
the stock.

But major exporters and consumer electronics makers were hit
by concerns about further yen strengthening, with Sharp
falling 5.7 percent to a 34-year low and Sony off 3.4
percent to its lowest point in more than three decades.

"The yen's gains are weighing on Tokyo shares. For global
shares to rise, investors will probably need more stimulus and
an improvement in economic sentiment," said Shun Maruyama, chief
strategist at BNP Paribas.

The Nikkei fell 3.3 percent last week as several U.S.
companies warned ahead of earnings season that first-quarter
profits would undershoot expectations as stuttering global
growth exerts a more damaging influence than expected.

Japanese printer makers tumbled after their U.S. rival
Lexmark International Inc was the latest in a string of
technology companies to warn of dwindling sales in Europe.

Seiko Epson fell 7.4 percent to close at a record
low while Canon dropped 3.1 percent to end near a
three-year low. Ricoh was down 3.8 percent.

Japan's corporate earnings reporting season will get into
high gear from next week, but some see the downside risk as
limited.

"At the moment, few people would expect profit forecasts to
be cut by 10-20 percent. So a further fall in the Nikkei would
not be that big," said BNP Paribas' Maruyama, adding that it
could drop to 8,500, but not approach its June closing low of
8,295.

Investors are awaiting an appearance at the U.S. Congress
appearance by Federal Reserve chairman Ben Bernanke, later on
Tuesday and Wednesday, to present his semi-annual monetary
policy report. A surprise decline in U.S. retail sales boosted
speculation of further stimulus measures from the Fed.
]

"The trouble is that more quantitative easing from the U.S.,
if it did come, would only make the yen stronger," said Ito of
Okasan Securities. "But the finance ministry isn't going to do
anything yet, it's just the same old refrain," he added,
referring to Azumi's warning on Tuesday.

STEEL SAGS

The broader Topix dropped 0.4 percent to 743.38.

Steelmakers were out of favour, with the sector
falling 4.3 percent> It was dragged down by Tokyo Steel
Manufacturing Co Ltd, which sank 14.4 percent after the company
on Friday widened its operating loss forecast for the first
quarter to 6 billion yen ($76 million), six times its previous
forecast. JPMorgan slashed target price and earnings forecasts
for the company.

Fellow steelmaker Yamato Kogyo lost 4.7 percent after Nomura
downgraded the company to 'neutral' from 'buy,' citing growing
competition in the H-beams market.

(Additional reporting by Hideyuki Sano; Editing by Richard
Borsuk)