TOKYO, May 8 (Reuters) - JFE Holdings ( JFEEF ), parent

of Japan's second-biggest steel maker, set aside 400 billion yen

($2.8 billion) for investment overseas over three years, as it

expects demand at home to stay weak and global markets to be

pressured by China's exports.

JFE's key strengths outside Japan are its partnerships with

JSW Steel Limited in India and with Nucor Corporation ( NUE ) in North

America, the company said, adding that it plans to increase its

overseas exposure through strategic local partnerships.

"In parallel with considering large-scale overseas

investments, including the acquisition of raw material

interests, promising opportunities to utilize our technological

capabilities through local partnerships in growth markets will

be pursued to capture growing steel demand overseas," it added.

JFE targets consolidated business profit of 700 billion yen

by fiscal 2035, up from 135.3 billion yen last year. However, it

expects the steel business to remain challenging amid falling

demand in Japan, rising exports from China and uncertainties for

the global economy resulting from U.S. tariffs.

For the year ended March 31, JFE Holdings ( JFEEF ) posted a 54% fall

in net profit to 91.9 billion yen, missing an LSEG forecast of

105.4 billion yen, amid lower steel output due to weaker demand

at home and overseas.

The company had projected a profit of 75 billion yen for the

fiscal year. In addition to low demand at home, the auto and

construction machinery sectors - which account for a relatively

high share of its exports to North America - face "a significant

risk from U.S. tariff measures", JFE said.

($1 = 143.9800 yen)