By Elaine Lies

TOKYO, Nov 25 (Reuters) - Japan's Nikkei stock average edged down 0.2 percent on Wednesday, with tech shares such as Advantest Corp weaker as the market shrugged off data showing Japan's exports grew last month.

Japan Airlines Corp climbed 3.5 percent on short-covering, a day after its shares fell to a record low on growing investor worries that Asia's largest airline by revenue could face bankruptcy as it struggles to win an agreement on pension cuts. Analysts said the market mostly ignored the impact of trade data released just before the open showing that Japan's exports grew in October thanks to robust shipments to Asia.

But trade was choppy, with the Nikkei moving in and out of positive territory as short-covering emerged on the back of technical signs shares had been oversold, though the longer-term outlook remains bleak.

"Basically we're seeing short-covering after a number of technical signs showing that the Nikkei was oversold, with some speculative buying of futures as well," said Hideyuki Ishiguro, a strategist at Okasan Securities.

"But the overall trend is still pretty weak."

The benchmark Nikkei was down 17.30 points to 9,384.28 after earlier hitting a four-month intraday low of 9,366.33. The broader Topix lost 0.2 percent to 827.53.

Some analysts were wary, noting that the Nikkei has neared a crucial support line at the 200-day moving average, which now comes in around 9,350, and that whether it can hold the line here may be critical for future moves.

"Though many in the market have been saying things are bad, we've at least held above this until now," said Kenichi Hirano at Tachibana Securities.

"If we break below it, though, things could get tough, with the Nikkei next taking aim at the July low of 9,050."

All three U.S. indexes edged lower, but activity was moderate ahead of the Thanksgiving holiday on Thursday. The U.S. stock market will be open for a half day of trading on Friday.

U.S. financial stocks were weak throughout the session, with some market players saying there was concern about banks' capital after news that the Fed asked lenders that were part of its "stress tests" to submit plans to repay government money.

BANKS, TECHS, JAL

Japanese banks were vulnerable as well, slipping into negative territory after a brief bounce on persistent fears they will have to tap the market for equity financing.

Mitsubishi UFJ Financial Group, Japan's biggest bank, lost 0.9 percent to 454 yen, with No. 3 bank Sumitomo Mitsui Financial Group down 0.6 percent to 2,675 yen. Japan's second-largest bank, Mizuho Financial Group, was flat.

Tech shares weighed the market as well, with Tokyo Electron losing 2.9 percent to 4,740 yen and Advantest, which makes chip-testing equipment, shedding 1.5 percent to 1,995 yen. Canon Inc slipped 0.6 percent to 3,330 yen.

But Japan Airlines climbed to 90 yen on short-covering after falling as low as 85 yen on Tuesday.

"The JAL issue is basically very similar to that of GM, but the talk is that it won't be allowed to fail," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Carmakers gained, with Honda Motor Co up 1.3 percent to 2,760 yen and Toyota Motor Corp gaining 0.6 percent to 3,400 yen. Nissan Motor rose 2 percent to 625 yen.

Kyowa Hakko Kirin gained 1.5 percent to 952 yen after the Nikkei business daily reported the company's chemicals segment will likely return to profitability on an operating basis in the October-December period due to a recovery in exports to China. (Reporting by Elaine Lies; Editing by Joseph Radford) ((elaine.lies@thomsonreuters.com; +81 3 6441 1807; Reuters Messaging:elaine.lies.reuters.com@reuters.net))
Keywords: MARKETS JAPAN STOCKS Reuters Terminal users can see other related news and rates by double-clicking on: All Nikkei indices All shares listed on Nikkei-225 N225 index TOPIX index Nikkei Japan 1000 TOPIX sector data Nikkei 300 index TOPIX futures data Osaka N225 data Chicago N225 data Top 30 by volume Top 30 by value Total volume Total value 1st section sector RICs All TSE weighted avg Top 30 gainers by pct Top 30 losers by pct Top 30 net gainers Top 30 net losers Active Japanese stocks Japan economic indicators ASIA-PACIFIC STOCK MARKETS: Pan-Asia Japan S.Korea S.E. Asia Hong Kong Taiwan Australia/NZ India China OTHER MARKETS: Wall Street Gold Currency Eurostocks Oil JP bonds ADR Report LME metals US bonds Stocks News US Stocks News Europe DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Japan diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news: Top News Japan U.S. company news Europe company news Forex news Global Economy news All Equity news Tech, Media, Telecoms Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: http://topnews.session.rservices.com LIVE PRICES & DATA: World stocks Currencies Dow Jones/NASDAQ Debt FTSE 100 LME price overview Yen/dollar

(Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.