Nikkei held below peak, Greece uncertainty keeps investors cautious
* Nikkei has gained 2.5 pct for the week * Market awaits nervously but expects resolution without Grexit - trader * Japan's upbeat economic data gives little surprise - analysts By Ayai Tomisawa TOKYO, June 26 (Reuters) - Japan's Nikkei share average dropped on Friday as investors took profits in a market that hit its highest levels since late 1996 earlier this week, opting for caution while uncertainty hung over whether Greece would manage to avoid defaulting. The Nikkei share average dropped 0.5 percent to 20,676.41 at the midmorning break, retreating from a 18-1/2-year high of 20,952.71 hit earlier on Wednesday. For the week, it has risen 2.5 percent. The market remains jittery as Greece failed again to reach an agreement with its creditors on Thursday, but investors held out hopes that talks over the weekend could succeed in avertng a default, traders said. "The market is reacting nervously, but not horribly. It's kind of holding its breath expectantly," said Stefan Worrall, director of equity at Credit Suisse. Meanwhile, data showed Japan's household spending rose more than expected in May. It was the first annual increase in more than a year, a signalled a ressumption in spending after last year's sales tax hike made consumers cut back. "It's good news but not too surprising as we've been seeing strong department store sales and upbeat convenience store sales lately," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. Mitsubishi Motors Corp shed 1.0 percent after media reports said that the automaker is recalling 460,000 cars because the air bags can push sun visors into passengers and cause injuries in a crash. Exporters were lower, with Toyota Motor Corp falling 0.7 percent and Honda Motor Co shedding 0.9 percent. The broader Topix dropped 0.8 percent to 1,658.28 and the JPX-Nikkei Index 400 fell 0.8 percent to 14,956.40. (Editing by Simon Cameron-Moore)
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