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Nikkei falls to 2-week low on China concerns, disappointing U.S. earnings

(Corrects percentage gain in Hitachi's share price and profit

in 9th paragraph)

* Nikkei falls 0.8 pct, Topix down 0.6 pct

* China Oct HSBC PMI due at 0145 GMT

* Hitachi jumps; Komatsu, Hitachi Construction sink

By Tomo Uetake

TOKYO, Oct 24 (Reuters) - Japanese shares fell to a two-week

low on Thursday morning on renewed concerns over China's

economic outlook, while disappointing earning from Caterpillar

Inc drove Komatsu sharply lower.

The benchmark Nikkei fell 0.8 percent to 14,313.53,

the lowest point since Oct. 10, moving further away from a

3-1/2-week high of 14,799.28 hit in the previous session.

The Nikkei slumped 2 percent on Wednesday as Chinese

money-market rates rose to three-month highs after the central

bank failed to inject cash for a second day as regulators showed

signs of concern that loose liquidity might be fuelling another

round of risky credit growth.

Worries about the Chinese economy, a major export market for

Japan, could intensify if upcoming manufacturing data from the

Asian giant fall short of market expectations. The data is due

at 0145 GMT.

"The Chinese economy appears to be doing all right so far

but talk of policy tightening got fresh attention yesterday. We

need to watch the PMI data and Asian shares," said Yuya

Tsuchida, strategist at Toyo Securities.

"Hedge funds, institutional investors and retail investors

are all waiting to see the data."

Heavy-equipment makers Komatsu Ltd and Hitachi

Construction Machinery Co Ltd slid 3.1 percent and 2.7

percent, respectively, after Caterpillar Inc posted a

lower-than-expected quarterly profit and cut its full-year

forecast on Wednesday.

The broader Topix dropped 0.6 percent to 1,189.32 in

relatively light trade, with volume at 25.7 percent of its full

daily average for the past 90 trading days.

Bucking the broad market, Hitachi Ltd climbed 6.6

percent after the electronics conglomerate's operating profit

rose 5.8 percent in April-September, beating its own projection

of an 11.4 percent fall.

Hitachi said it was helped by strong sales to the automotive

and information technology sectors. It was the

second-most traded stock by turnover on the main board.

Panasonic Corp gained 0.5 percent after the Nikkei

business daily said the company plans to dramatically cut back

on chipmaking, slashing the business's 14,000-strong workforce

by half and possibly selling some plants.

(Editing by Shri Navaratnam)