* Nikkei slips on profit-taking after bounce on Thursday
* Nerves before U.S. jobs data weigh on market, trade thin
* Konica Minolta tumbles after earnings, Pioneer falls
By Elaine Lies
TOKYO, Aug 7 (Reuters) - Japan's Nikkei stock average edged down on Friday as investors, nervous ahead of crucial U.S. jobs data, locked in profits, with Honda Motor Co and other carmakers down after climbing the day before.
Konica Minolta Holdings tumbled nearly 10 percent after Nomura Securities cut its rating to "neutral" from "buy" and lowered its target price to 970 yen from 1,200 yen, following the company's earnings announcement on Thursday.
Wall Street slipped as investors turned cautious a day before the July employment data and took profits in the wake of recent strong gains, and market analysts said spillover from this was prompting sales of Japanese shares as well.
"Nobody knows what the jobs data will do to the market. The U.S. market basically stalled ahead of this," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"We're certainly not heading into a downtrend, but we've been gaining for five months now mainly on expectations that company results will improve and it's hard to know if we can maintain this momentum into the rest of the year. Rises will be tough."
Other analysts noted that Japanese investors were jittery ahead of the weekend and next week, when business slows and many people take summer vacations.
In thin trade, the benchmark Nikkei shed 1 percent or 104.54 points to 10,283.55 after hitting a 10-month closing high of 10,388.09 on Thursday. The broader Topix lost 1.2 percent to 946.09.
The U.S. economy is expected to have lost 320,000 nonfarm payroll jobs in July, a hefty number but still an improvement over last month's drop of 467,000, while the unemployment rate is expected to have risen to 9.6 percent.
Analysts said that while expectations are not as high as they were last month, when the figures were an unhappy surprise that sent markets tumbling, some weak U.S. economic data this week has cooled investor optimism about the speed of economic recovery.
The U.S. service sector contracted in July at a faster pace than in June, with the Institute for Supply Management's services index falling to 46.4 last month from 47.0 in June -- below a median forecast for a rise to 48.
"Part of the problem with last month's jobs data was that people were expecting too much, but I think this time they're a bit more realistic," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
"Even if the figures aren't that good, the market's prepared to an extent. Once the data's out we can move on."
CARS RETREAT
The Nikkei is likely to drift in a narrow range around 10,300 for the next few weeks, with attention shifting to macroeconomic indicators and Japan's August 30 election, but longer range targets remain the psychologically important 10,500 and then 10,800 -- the Nikkei's level last October.
Carmakers and related firms lost ground on Friday after Thursday's bounce, when they rose on hopes the U.S. "cash for clunkers" sales incentive would be extended.
The U.S. Senate approved a $2 billion extension of the programme during morning trading in Tokyo, with U.S. President Barack Obama expected to sign it quickly. [ID:nN06362591}
"This will support carmakers over the longer term by helping sales in August and September perk up, with stronger carmakers helping keep the Nikkei steady," said Fujio Ando, senior managing director at Chibagin Asset Management.
Honda fell 2.6 percent to 3,030 yen and Toyota Motor lost 2.9 percent, to 4,010 yen. Tyre maker Bridgestone Corp, which announces earnings on Friday, shed 2.4 percent.
Otherwise, activity centred on earnings, with investors dumping shares of companies that fared poorly.
For the three months to June, Konica Minolta recorded an operating loss of 589 million yen, compared with a 24.5 billion yen profit a year earlier. It fell 9.8 percent to 894 yen.
"Results for 10/3 (the year to March 2010) Q1 revealed a much greater downturn for color copies than we had previously anticipated," Nomura's Japanese equity research analyst wrote in a client note.
Kubota Corp sank 6.9 percent to 759 yen after the machinery maker reported a 70 percent drop in quarterly operating profit, citing slow demand for farm equipment and a stronger yen.
Trade slowed on the Tokyo exchange's first section, with 843 million shares changing hands, below last week's morning average of 959 million.
Declining stocks outnumbered advancing ones by 4 to 1. (Reporting by Elaine Lies; Editing by Joseph Radford)