Nikkei edges up, Ricoh gains while Canon slides

*Nikkei edges up after seesaw trade

*Canon touches 4-mth low, fears emerge after Ricoh's purchase

*Economic uncertainty clouds earnings picture, deters trade (Adds stocks, details)

By Elaine Lies

TOKYO, Aug 28 (Reuters) - Japan's Nikkei stock average edged up 0.1 percent on Thursday in seesaw trade, with Ricoh Co Ltd surging after it bought a U.S. distributor, a move that sent rival Canon Inc tumbling to a four-month low.

Shares in Acom Co soared on the news that top bank Mitsubishi UFJ Financial Group would boost its stake in the consumer lender. But growing uncertainty about the global and domestic economies weighed on banks, while defensive shares such as pharmaceuticals fared well.

Investors were put off by the increasing economic gloom, keeping a lid on volume levels that were within sight of the year's low hit on Wednesday.

"Up to now the world was watching the economic situation in the U.S., but now eyes are turning to Europe as well. The global economy is clearly slowing," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

"It's hard to really imagine a recovery, and so it's impossible to predict what's going to happen with company earnings. This makes everybody want to avoid trading."

Shares of Canon slid 5.2 percent to 4,790 yen, its lowest close since mid-April after Ricoh announced its $1.6 billion acquisition of U.S. distributor Ikon Office Solutions , saying the move would help it gain customers in Europe and the United States, a key market.

Canon machines represent 60 percent of the products Ikon handles at the moment, with Ricoh machines accounting for 30 percent. But Ricoh said it aims to replace Canon products with its own printers and copiers in three to four years.

"There's no question this will hit Canon pretty hard," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Ricoh, on the other hand, at one point surged more than 6 percent, though it fell back to close up 2.9 percent at 1,777 yen.

The benchmark Nikkei .N225 gained 15.29 points to 12,768.25, having moved through a tight range during the day, with profit-taking emerging close to 12,900 and the downside solid around 12,500.

The broader Topix slipped 0.3 percent to 1,219.53.

TOYOTA CUTS FORECAST

Toyota Motor Corp said it would miss its goal of selling more than 10 million vehicles next year, cutting its forecast by nearly 7 percent due to a severe downturn in Western markets driven by high fuel prices and a credit crunch.

But investors shrugged off the news, with Toyota ending flat at 4,770 yen.

Banks slid on the general economic gloom, with Mizuho Financial losing 1.1 percent to 452,000 yen and Mitsubishi UFJ down 0.9 percent to 810 yen.

Acom shares closed 8.8 percent higher at 3,090 yen on the news Mitsubishi UFJ was seeking to more than double its stake from its current holding of 15 percent.

Pharmaceuticals also did well as investors sought out stocks seen as resilient to an economic downturn, with Eisai Co Ltd climbing 2.2 percent to 4,260 yen and Astellas Pharma Inc up 1.3 percent to 4,840 yen.

Trade was light, with 1.39 billion shares changing hands, compared with last week's daily average of 1.59 billion.

Declining shares beat advancing ones by 972 to 613. (Reporting by Elaine Lies; Editing by Edwina Gibbs)