TOKYO, June 17 (Reuters) – Japan’s Nikkei average fell 0.7 percent on Thursday after five days of gains, coming off one-month highs, though support was expected to hold at the level of the benchmark’s 25-day moving average.

The Nikkei was stuck near 10,000, which market players say is a prerequisite for confirming a double bottom, but further rises were likely to be hard going amid an apparent lack of investor interest, both from overseas investors and at home.

Foreign investors sold a net 916.9 billion yen of Japanese stocks last week, more than the 75.2 billion yen they sold in the previous week and the biggest outflow in one week since March 2008, Finance Ministry data showed.

“Given where the market stands, investors want to bet on a rebound as long as other financial markets — particularly moves in dollar/yen and euro/yen — are calm,” said Akio Yoshino, chief economist at Societe Generale Asset Management.

“But the environment is actually pretty bad. Not only are Greece’s problems bad but the contagion is also serious, with Spain’s yields rising. The market had been ignoring that aspect up until now but the adjustment in stock prices was probably inevitable.”

A Spanish newspaper reported that the European Union, International Monetary Fund and U.S. Treasury were drawing up an emergency credit line for Spain.

The European Commission denied the report, but the spread between the yield on 10-year Spanish bonds and German bunds hit the highest level in the euro’s 11-year history. [ID:nLDE65F0GX]

Coming off a 1-month high hit the previous day, the benchmark Nikkei .N225 shed 67.75 points to 9,999.40 after spending most of the day above 10,000, a key level that has been both support and resistance at different times over the past year.

It had risen 6.7 percent over the past five trading days in its best such streak since a six-day run from Nov. 30 last year.

Support was seen around 9,800, the level of the Nikkei’s 25-day moving average, after the Nikkei closed above it on Tuesday for the first time in roughly two months.

The next resistance levels will likely be around 10,200 and 10,300, near the Nikkei’s 50-week moving average and its 200-day moving average.

In addition, the 38.2 percent retracement from the Nikkei’s April high of 11,408.17 and its June low of 9,378.23 comes in around 10,156.

The broader Topix slipped 0.6 percent to 887.48.

Market players said on Wednesday that long positions had accumulated in blue chip shares, leaving them vulnerable if upward momentum peters out.

“Wednesday’s rises also were without much strength, since the cash market was pushed up mainly by short-covering in futures,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

Trade was thin on the Tokyo exchange’s first section, with 1.5 billion shares changing hands but up from the four-month low marked early this week.

Declining shares outnumbered advancing ones by 983 to 531.

TAKEFUJI CLIMBS

Shares of consumer lender Takefuji Corp (8564.T) ended the day up 6 percent at 302 yen after a company source said it has secured the 41.4 billion yen ($453 million) of funds it needed to redeem convertible bonds due on Saturday. [ID:nTKB006866]

The news confirmed a report in the Nikkei business daily.

But shares of exporters fell after leading gains in the broader market the previous day, hurt by a flat Wall Street finish in the wake of mixed economic data underlining the uneven nature of the economic recovery.

U.S. housing starts fell more than expected in May to a five-month low, casting a shadow over better-than-expected industrial production data for the same month and underscoring the uneven nature of the recovery, helping Wall Street end flat. [ID:nN16144404]

Sony Corp (6758.T) slid 2.8 percent to 2,564 yen and Kyocera Corp (6971.T) slipped 2.9 percent to 7,990 yen. Honda Motor Co (7267.T) fell 0.8 percent to 2,736 yen.

Shares of Fujitsu Ltd (6702.T) and Toshiba Corp (6502.T) gained after the Nikkei business daily said they had reached a deal to integrate their cell phone businesses, with Fujitsu to take a majority stake in a joint venture to be launched as early as October. [ID:nSGE65F0J1]

Fujitsu rose 1 percent to 593 yen and Toshiba climbed 0.8 percent to 487 yen. (Editing by Edwina Gibbs)