Nikkei edges down amid economic gloom

By Elaine Lies

TOKYO (Reuters) - Japan's Nikkei stock average edged down 0.3 percent on Friday, taking aim at the longest losing streak in more than half a century, with high-tech shares such as Tokyo Electron Ltd sinking in the face of general economic pessimism.

Paper shares extended losses on high oil prices after oil set a new record of more than $145 a barrel and general selling emerged across a broad range of sectors, though gains in machinery such as Komatsu Ltd help brake further falls. But with a slew of big events over and U.S. markets closed on Friday for Independence Day, investors were searching for direction and the market was moving more according to share-specific factors than any comprehensive market factors.

Market players said reassurance in the market sparked by U.S. shares having dodged several potential bullets on Thursday, including jobs data that was in line with forecasts, was offset by a grim longer-term outlook.

"Basically the fact that the dollar held its own after the European Central Bank move and jobs came in as expected helped reassure the market a bit," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

"But with so many factors in the U.S. so poor, people can't really be optimistic."

The dollar rallied on Thursday after jobs data suggested the U.S. job market and economy were not as badly off as many had feared, while the European Central Bank president struck a less aggressive tone on prospects for interest rate hikes.

The benchmark Nikkei fell 40.87 points to 13,224.53, heading for its longest losing streak since a 15-day period in 1954. The broader Topix was down 0.2 percent at 1,295.80. "While the Nikkei appears to be headed for a 12th straight day of losses, the actual percentage amount of the fall is not so great, so the length of the losing streak shouldn't really be made that much fuss over," Osakabe added. But other market players said the extended fall -- which will be the longest since a 15-day losing streak in 1954 -- had complicated matters.

"While there is a sense that the market's fallen too far, there's no reason to buy in this situation and no especially attractive sectors," said Toshio Sumitani, general manager at Tokai Tokyo Securities.