Japanese shares were flat in early trading on Thursday following modest losses on Wall Street
after Federal Reserve chairman Ben Bernanke warned that the U.S. economy could shrink in the first half of the year.

'U.S. stocks ended relatively firm as the Fed chief's comment was not a big surprise,' said Yumi Nishimura, manager at equity marketing at Daiwa Securities SMBC.

The Dow Jones industrial average dropped 0.4 percent on Wednesday after surging more than 3 percent Tuesday on optimism that the worst of the credit crisis may be over.

'It now appears likely that gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,' Bernanke told the joint economic committee of Congress on Wednesday.

But Bernanke said conditions are expected to improve later this year and into 2009, helped by the government's $168 billion stimulus package of tax rebates for the public and tax breaks for businesses as well as the Fed's aggressive monetary easing.

At 10:11 a.m. (0111 GMT), the Nikkei 225 Stock Average was up 1.95 points or 0.01 percent at 13,191.31. The benchmark index jumped 4.2 percent on Wednesday, leading the surge in Asian stocks, as investors took their cue from the big rally on Wall Street Tuesday.

The broader Topix was up 0.94 point or 0.07 percent at 1,283.01.

Shares of automakers were lower as investors locked in recent gains. Toyota Motor (NYSE:TM) shed 2.3 percent to 5,120 yen and Honda Motor slipped 3.7 percent to 2,995 yen. Nissan Motor declined 0.9 percent to 870 yen and Suzuki Motor was down 1.2 percent at 2,540 yen.

Shares of Toshiba Corp. advanced 6.4 percent to 782 yen after the Nikkei newspaper reported that the electronics giant will likely obtain orders worth 1.4 trillion yen to construct four nuclear power plants in the United States.

Kobe Steel was up 0.3 percent at 301 yen after a report that the steelmaker probably posted a group pretax profit of slightly below 155 billion yen in the fiscal year ended March, better than its
forecast of 150 billion yen.

Shares of oil and gas company Inpex Holdings advanced 2.7 percent to 1.14 million yen on expectations higher oil prices will boost its profit.

($1 = 102.31 yen)
masami.hachisu@thoms on.com
Copyright Thomson Financial News Limited 2008. All rights reserved.

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

Source: Tokyo shares flat after Bernanke warns U.S. recession possible - UPDATE

__________________
Submissions | Hip-Hop 4 Obama