* Nikkei may be supported above 9,000 if yen stays current level
* Rising short-sale ratio suggests stocks are bottoming out
* Exporters lower on global economic worry
* Construction companies up on JPMorgan upgrades
By Ayai Tomisawa
TOKYO, Aug 17 (Reuters) - The Nikkei average fell on Wednesday after a meeting between the heads of France and Germany failed to quell doubts about euro-zone leaders' ability to contain sovereign debt woes.
Analysts said the Nikkei's hold above 9,000 could depend on whether the yen rises further, but even if it slips below that point it should not take long to recover as investors are likely to pick up shares with attractive valuations.
"There are other signs in the Tokyo market that suggest stock prices may bottom out soon," said Chisato Haganuma, chief strategist at Mitsubishi UFJ Morgan Stanley Securities. "One of them is to look at the short-sale ratio, which is peaking."
Haganuma said history shows that when a short-sale ratio peaks share prices tend to bottom out. The ratio on the Tokyo market stood at 29 percent early this month and peaked, suggesting investors' risk-averse attitude will likely recede.
The benchmark Nikkei ended 0.6 percent lower at 9,057.26, while the broader Topix shed 0.3 percent to 776.65.
Around 65 percent of stocks listed on the exchange's main board are trading below book value, while the average price-to-book ratio of stocks on the S&P 500 is 1.9.
Still any upside is likely to be limited until there are signs of an easing in global economic problems.
"Japan stocks are relatively cheap. But unless investor concern about ongoing European debt issues abates the market may not recover quickly," said Naohito Miura, a fund manager at Shinkin Asset Management.
German Chancellor Angela Merkel and French President Nicolas Sarkozy detailed plans for closer euro-zone integration but they did not include boosting the size of the zone's rescue fund or sales of euro bonds.
Bellwether exporters underperformed, with Honda Motor Co falling 2.5 percent to 2,552 yen, Sony dropping 0.8 percent to 1,687 yen and Toyota Motor shedding 1.5 percent to 2,855 yen.
Shares of Nintendo Co were up 2.8 percent at 12,030 yen after data from a game industry researcher showed Nintendo enjoyed a big jump in sales of its 3DS handheld game player in Japan following a price cut.
Sales of the 3DS came to 214,821 units during the week of Aug. 8-14, the second-highest week ever, according to research firm Enterbrain.
Construction firms outperformed after JPMorgan raised the sector view to "neutral" from "bearish" and hiked the ratings of several contractors.
Taisei Corp added 4.3 percent to 195 yen, Kajima Corp gained 3.0 percent to 238 yen, and Obayashi Corp rose 3.7 percent to 367 yen.
JPMorgan raised Taisei and Obayashi to "overweight" from "neutral" and hiked Kajima to "neutral" from "underweight", saying reconstruction demand from the March earthquake in northeast Japan is rising.
Sharp Corp rose 1.8 percent to 639 yen after MF Global FXA Securities wrote in a sales note that Apple Inc may invest $1 billion in the panel maker's Kameyama factory in western Japan to secure a supply of screens for iPhones and iPads.
Volume was thin, with only 1.6 billion shares changing hands on the Tokyo stock exchange's main board, against last week's average daily volume of 2.4 billion. Declining shares outnumbered advancing ones by 766 to 744. (Editing by Michael Watson)