TOKYO, Oct 5 (Reuters) - Japan's Nikkei average may slip on Monday after U.S. stocks dipped late last week as weak jobs data underscored the fragility of the U.S. economy's recovery.
One stock to watch may be Fast Retailing, which said on Friday that same-store sales at its Uniqlo casual-clothing chain in Japan jumped 31.6 percent from a year earlier in September, marking the biggest monthly gain in 10 months.
Wall Street stocks slipped after U.S. non-farm payrolls dropped more than expected in September, pushing the unemployment rate to a 26-year high of 9.8 percent.
The Standard & Poor's 500 Index dropped 0.45 percent on Friday.
"The Nikkei is likely to start a bit lower, but given that U.S. shares did not fall that much, Japanese equities may rebound if they find some firmness when they dip," said Toshiyuki Kanayama, market analyst for Monex, Inc.
The Nikkei is likely to trade between 9,600 and 9,800 on Monday, analysts said.
The Nikkei fell 2.5 percent or 246.77 points to a two-month closing low of 9,731.87 on Friday.
Nikkei futures traded in Chicago ended Friday at 9,735.00, little changed from the Osaka close of 9,730.
The Nikkei fell 5.2 percent last week, its worst weekly loss in about three months. It has fallen below trendline support drawn from its March trough near 7,021 and through its July low near 9,050, and on Friday the benchmark index dropped below the bottom of the cloud on daily Ichimoku charts.
Some analysts say the next downside target may be 9,500, with a break below that opening the way for a drop towards its July low of 9,050. Investors will be keeping an eye on fluctuations in the yen, which hit an eight-month high against the dollar of 88.23 yen last week.
The yen stood at 89.55 yen to the dollar in early Asian trade on Monday.
Group of Seven finance ministers and central bankers offered nothing new to allay concerns over dollar weakness in a statement on Saturday after they met in Istanbul. The G7 rich nations repeated their view that too much volatility in exchange rates tends to threaten economic stability.
The impact of a stronger yen on Japanese exporters' earnings is a concern for market players, as it reduces the yen value of exporters' repatriated profits.
The head of Toyota Motor Corp on Friday called the current dollar-yen rate "very tough", and Honda Motor Co Chief Executive Takanobu Ito said on Thursday a dollar below 90 yen was "too painful". > Wall St dips on weak jobs, factory data > Dollar drops as jobs data bolsters low rates view > Profit-taking weighs US bonds down ahead of supply > Gold rises as dollar weakens on US payrolls data > Oil falls over 1 pct, U.S. jobs data weighs STOCKS TO WATCH
-- Mitsubishi Heavy Industries
Mitsubishi Aircraft, a unit of Mitsubishi Heavy Industries, said on Friday it had won an order for up to 100 regional jets from a U.S. airline, breathing life into Japan's nascent aircraft industry.
-- Mori Seiki
Mori Seiki, a general manufacturer of cutting machine tools, said on Friday it saw its group operating loss expanding to 28.0 billion yen for the year to next March, up from its previous forecast for an operating loss of 20.0 billion yen. Mori Seiki said it now expects its group net loss to total 28.7 billion yen in the year to March, more than its previous forecast of a 20.0 billion yen loss.
-- Shimano Inc
Shimano Inc, a maker of bicycle parts, cut its forecast for group net profit for the year to December to 15.6 billion yen on Friday from its previous forecast for 17.5 billion yen. Shimano, however, kept its operating profit forecast unchanged at 24.5 billion yen.
-- Daihatsu Motor Co
Daihatsu plans to start sales of a gasoline-powered mini-vehicles with 20-percent higher fuel efficiency in 2010, the Nikkei business daily said on Monday. That would put the fuel efficiency of its mini-vehicles on a par with that of Toyota Motor Corp's and Honda Motor Co's hybrids, the paper said. (Reporting by Masayuki Kitano; Editing by Hugh Lawson)