* Nikkei down 0.7 pct, dipping below options settlement level
* Aeon up after earnings, retailers in focus - fund manager
* Semiconductors fall on brokerage downgrades following quake
* Toyota down; source says may delay this year's earnings f'cast
By Antoni Slodkowski and Ayai Tomisawa
TOKYO, April 15 (Reuters) - Japan's Nikkei stock average fell in thin trade on Friday, with chip stocks leading losses after ratings downgrades.
Disappointing U.S. jobs data, concerns of further Chinese tightening, and the re-emergence of Europe's debt woes have also weakened sentiment towards equities. [ID:nN14146589]
Tokyo stocks have regained around two-thirds of their losses suffered after the March 11 earthquake. But trade has turned more volatile and thinned out ahead of earnings reports that may pose more questions than give answers, as many firms will likely not give forecasts for this business year.
One such company may be Toyota Motor Corp , which fell 0.9 percent to 3,240 yen. A source on Friday confirmed earlier reports that the automaker is considering delaying its announcement of this year's earnings forecasts until after it releases its fourth-quarter and full-year results on May 11.[ID:nL3E7FF03W]
"Foreigners have moved to the sidelines and are waiting for earnings in order to start trading more aggressively, while Japanese institutional players sell whenever the market edges a bit higher," said Tetsuro Ii, chief executive officer of Commons Asset Management.
Market observers said that the market may see thin trading next week as well, but the Nikkei's downside should be supported above 9,500.
"There are expectations for the Bank Of Japan's exchange traded funds when the Nikkei nears 9,500, so the index should be in a box range for next week, with upside around 9,800," said Hikaru Sato, a senior technical analyst at Daiwa Securities Capital Markets.
The benchmark Nikkei average ended down 0.7 percent, or 62.40 points, at 9,591.52 -- dipping below the settlement of April options prices last week at 9,612.51. The broader Topix shed 0.6 percent to 841.29.
Immediate support is seen at the Nikkei's 25-day moving average at 9,533.69, analysts said.
For the week, the Nikkei has shed 1.8 percent.
Volume stayed depressed with 2.09 billion shares changing hands on the Tokyo Stock Exchange's first section, lower than the last week's daily average of 2.6 billion shares.
This week's average daily volume was 2.14 billion shares.
While the Nikkei remains nearly 8 percent below its pre-quake levels, the MSCI index of Asian stocks outside Japan has gained around 7.6 percent since the disaster.
In a post-quake review of semiconductor stocks, Bank of America Merrill Lynch downgraded Tokyo Electron and Disco Corp to "underperform" from "buy".
The brokerage slashed Tokyo Electron's target price to 4,000 yen from 6,000 yen, citing expectations for weaker demand for semiconductors and the negative impact of the March 11 quake on supply chains.
Shares of Tokyo Electron fell 2.8 percent to 4,385 yen, while Disco slid 4.7 percent to 5,290 yen.
RETAILERS IN FOCUS
"The index moves are rather lukewarm, but people who can move fast in and out of the market are making a lot of money on stocks with news about them," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, adding that the market is dominated by short-term individual investors.
Japanese investors looked for clues about profit estimates for the next business year in earnings results announced by retailers who kicked off the cautiously awaited first post-quake earnings season last week.
Aeon Co , Japan's second-biggest retailer, climbed 2.1 percent to 945 yen after it forecast on Thursday a 1.5 percent rise in operating profit this financial year, with demand for basic goods set to limit the impact of a post-quake decline in overall consumer spending. [ID:nL3E7FE0X4]
"With so many uncertain factors ahead of the earnings season, people look to these companies and try prepare for the big players announcing at the end of the month," said Commons' Ii.
Meanwhile, Lawson Inc , Japan's No.2 convenience store chain, rose 2.2 percent to 4,005 yen after forecasting a 3.5 percent increase in operating profit for the year that began in March, to 57.5 billion yen ($688.54 million). [ID:nT146CR4ZN][ID:nL3E7FE0X4]
The projection slightly exceeded the 56.9 billion yen consensus in a survey of six analysts by Thomson Reuters I/B/E/S.
Sumitomo Metal Industries , Japan's third-biggest steelmaker, dropped 1.1 percent to 173 yen after saying on Thursday it would take a 60 billion yen hit for the year that ended on March 31 due to damage resulting from last month's earthquake and tsunami. [ID:nL3E7FE16J] (Editing by Joseph Radford)