Japan's Nikkei stock average fell 0.9 percent on Tuesday, weighed down by tech shares such as TDK Corp, though slides were checked by rises in shares such as drugmakers and telecommunications companies. Toyota Motor Corp edged up after Merrill Lynch upgraded it to "buy" from "underperform," citing growing profit prospects for hybrid cars. But trade was thin, with a number of investors waiting to see how Wall Street will reopen after the Memorial Day holiday and in the wake of a public holiday in the United Kingdom. Investors were also waiting for cues from U.S. economic indicators due out later this week and the fate of struggling U.S. carmaker General Motors. "The economies of both the United States and China aren't just going to surge rapidly upwards, and what we're seeing today is probably a bit of a reality check," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. The benchmark Nikkei shed 80.06 points to 9,266.94, while the broader Topix lost 0.4 percent to 879.76. Others said the Nikkei was retreating after a failed attempt on Monday to make a sustained break above resistance at 9,400, about where its 200-day moving average comes in. The Nikkei rose briefly as far as 9,402.76 on Monday. But analysts said the chance of sharp falls was slight, with index-related buying by newly set up funds supporting the market. "Given that both the government and Bank of Japan have raised their assessment of the economy, this is likely to spark buying by retail investors, who may well come in on any dips," said Katsuhiko Kodama, senior strategist at Toyo Securities. "Basically, what we need to do now is verify economic trends indicator by indicator." The government raised its assessment of Japan's economy for the first time in three years on Monday, saying the pace of worsening is slowing as exports and industrial output are nearing bottom, a week after the Bank of Japan did the same. NORTH KOREA, GM Yonhap news agency quoted a South Korean official as saying that North Korea is ready to fire another short-range missile off its west coast either on Tuesday or Wednesday, a day after testing a nuclear device and firing off three short-range missiles.. "This isn't necessarily going to have much of an impact -- after all, the market shrugged off the nuclear test yesterday -- but it's also not particularly encouraging either," Daiwa SB's Ogawa added. High tech shares slipped, largely on profit-taking, with Tokyo Electron down 3 percent to 4,240 yen, while TDK slipped 3 percent to 4,150 yen. Industrial robot maker Fanuc lost 1.3 percent to 7,440 yen. Toyota edged up 0.8 percent to 3,590 yen after the upgrade, which also cited signs of a bottoming out in global new car demand. "In the global car industry, following the downsizing of GM's operations, only Toyota now stands as having a clear outlook for market share and profit growth on the back of its eco-car business," wrote analyst Koichi Sugimoto.

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