* Nikkei trading largely directionless
* 25-day moving average offers solid support near 9,800
* ANA, Orix tumble on news of possible share offering
* Construction machinery makers rise after China PMI
By Elaine Lies
TOKYO, July 1 (Reuters) - Japan's Nikkei stock average clawed up 0.1 percent on Wednesday in largely directionless trade, with Orix Corp and All Nippon Airways sliding on news of possible public share offerings. Construction machinery makers such as Komatsu gained after China's official purchasing managers' index (PMI) for June showed the country's economic recovery is on more solid ground, while rises by an array of defensive shares also offered support. Response to the Bank of Japan's quarterly survey of business confidence was mixed, with some analysts saying it had no impact on the market, but others, noting lagging capital spending, saying it was slightly negative.
Confidence among big manufacturers pulled back from a record low hit three months ago, the Bank of Japan's tankan corporate survey showed, as exports and output improved from a severe downturn late last year.
But figures showed big firms plan to cut capital spending, a key driver of the economy, by 9.4 percent in the financial year to March 2010, against the market's median forecast for a 6.9 percent fall.
"Basically, the tankan showed that things aren't all that good in the near-term but seemed encouraging for the longer term, making its overall impact neutral," said Kenichi Hirano, operating officer at Tachibana Securities.
"I'd have liked to see slightly better capital spending, but given the current situation it's only natural that it should fall -- after all, with production down, the last thing manufacturers can do right now is spend."
In thin and narrow trade, the benchmark Nikkei wobbled from negative to positive territory, gaining 8.88 points to 9,967.32, while the broader Topix rose 0.1 percent to 930.56.
Support was solid for the Nikkei at around 9,800, about where the 25-day moving average comes in.
The Nikkei rose nearly 23 percent in the April-June quarter, its best quarterly gain since a 23.4 percent rise in the July-September quarter of 1995. But Hirano said it would be tougher to make gains this quarter as the market would be working through a number of factors, including company earnings starting later this month.
TUMBLING ON PUBLIC OFFERING
All Nippon Airways Co (ANA) and Orix slid after news of possible public share offerings, with ANA becoming the biggest drag on the Nikkei 225.
ANA, Japan's second-largest airline, plans to raise more than 150 billion yen ($1.6 billion) in a public share offering, five sources familiar with the matter said.
Orix, Japan's biggest leasing firm and a major property investor, plans to raise about 100 billion yen ($1 billion) through a public share offering, three people familiar with the matter said.
Orix would become the latest in a series of Japanese financial firms to tap recently more buoyant equity markets for funds, amid signs the economy and property market to which it is heavily exposed may have bottomed out.
Orix lost 5.7 percent to 5,480 yen and ANA fell 5.9 percent to 317 yen. ANA's rival Japan Airlines lost 1.1 percent to 184 yen.
But selling pressure, augmented by dealers moving to lock in profits as the Nikkei edged back up towards 10,000, was countered by investor buying of a wide array of defensive shares, such as drugmakers, as well as chip shares such as Advantest Corp, up after a supportive performance by U.S. peers.
China's PMI for June rose to 53.2 from 53.1 in May, the fourth straight month that the official PMI has stood above the pivotal 50 mark.
As a result, Komatsu and Hitachi Construction, which often rise with signs of brightening in China's economy on expectations of building projects there, both rose.
Komatsu gained 2.6 percent to 1,531 yen and Hitachi Construction rose 1.9 percent to 1,605 yen.
Trade fell off slightly, with 968 million shares changing hands on the Tokyo exchange's first section compared to last week's morning average of 1.3 billion.
Declining shares outnumbered advancing ones 769 to 745. (Reporting by Elaine Lies; Editing by Joseph Radford)