* Nikkei up 0.4 percent by mid-afternoon
* Robust earnings expected in Japan this week
* China-related shares drop on fears of greater tighteneing
By Antoni Slodkowski and Ayai Tomisawa
TOKYO, Jan 24 (Reuters) - Japan's Nikkei rose on Monday on
bargain hunting after a sell-off last week, as investors piled
into resource shares and exporters, with the mood brightened by
hopes for robust October-December period earnings due this week.
The benchmark booked its biggest daily fall in 2 months in
heavy volume on Friday, as energy-related stocks fell amid fears
of more monetary tightening by China triggering profit-taking.
"Investors have so far reacted positively to reports of hikes
in operating profit and they expect strong earnings on a pick-up
in the global economy and a dollar/yen rate that kept above
firms' conservative estimates," said said Masayuki Otani, chief
market analyst at Securities Japan, Inc.
Big ticket exporters including Canon Inc <7751.T> and Kyocera
Corp <6971.T> as well as Japan's biggest personal computer firm
NEC Corp <6701.T> are due to report on Thursday.
Fuji Heavy Industries Ltd <7270.T> gained 1 percent to 688
yen after the Nikkei business daily said the Subaru-brand vehicle
maker will likely post a group operating profit tripling the
previous year's tally and beating earlier estimates.
[]
By mid-afternoon the benchmark Nikkei <> was up 0.4
percent, or 44.48 points, at 10,319.14, while the broader Topix
index <> also rose 0.4 percent to 914.20.
HONDA LEADS ADVANCE
Honda Motor Co <7267.T> led the advance on the Nikkei, adding
3.7 percent to 3,400 yen in heavy trade after the Argentine
government said on Friday Japan's second-largest car maker will
start producing its City model at a new plant in Argentina in
March. []
Nomura Securities also hiked Japan's second-largest
automaker's rating to "buy" from "neutral" on
stronger-than-expected U.S. sales.
But gains on the Nikkei were limited as construction
machinery maker Komatsu Ltd <6301.T> fell 2.1 percent to 2,365
yen, while Hitachi Construction Machinery Co <6305.T> was also
1.6 percent lower at 1,937 yen, as markets cautiously awaited
further tightening steps in China.
The two companies assemble and sell their products in China
after importing major parts from Japan.
"Both in October and December China hiked interest rates
within 10 days of raising reserve requirements for banks, so
markets continue to be a bit jittery as China didn't embark on
more tightening steps last week after again raising RRRs in
January," said Hideyuki Ishiguro, a supervisor in the investment
strategy section of Okasan Securities.
GETTING TECHNICAL
On technical charts, the Nikkei was still hovering below its
25-day moving average, a gauge often used by Japanese traders,
which now stands at 10,397, showing that any improvement in
sentiment is still fragile.
"On top of domestic earnings, investors may not want to take
large positions before big U.S. events such as the FOMC meeting,"
said Kenji Shiomura, a market analyst at Daiwa Securities.
The Federal Reserve's Federal Open Market Committee will hold
a two-day meeting on Tuesday and Wednesday where it is expected
to paint a cautious view of the world's biggest economy.
Bargain hunters chased resource stocks after they tumbled on
Friday, with Japan's biggest gas and oil developer Inpex Corp
<1605.T> climbing 2.9 percent to 512,000 yen and the country's
biggest commodities trader, Mitsubishi Corp <8058.T>, gaining 1.9
percent to 2,316 yen.
(Editing by Joseph Radford)
