* Canon gains after nudging up profit outlook
* JFE extends gains on earnings, brokerage upgrade
* Pause after rally likely but market outlook still upbeat
* Earnings season in full swing; Honda to report later
By Aiko Hayashi
TOKYO, July 29 (Reuters) - Japan's Nikkei average rose 0.2
percent on Wednesday, helped by companies such as Canon <7751.T>
which nudged up its profit outlook, but investors were cautious
as they awaited more corporate earnings reports.
Shares of JFE Holdings <5411.T>, the world's No.5 steelmaker,
extended gains, jumping 3.9 percent after it forecast a full-year
profit on Tuesday and after Goldman Sachs raised its rating to
"buy" from "sell". []
Honda Motor <7267.T>, Nissan Motor <7201.T> and Nomura
Holdings <8604.T> are among companies scheduled to announce
results later in the day, as Japan's reporting season gets into
full swing this week.
"It's natural for the market to take a breather due to
investor fatigue after a nine-day winning streak and caution
before earnings reports," said Fumiyuki Nakanishi, manager at
SMBC Friend Securities.
"But foreign investors appear to have a bullish view on the
outlook for the stock markets and that's providing support for
blue-chip stocks and a solid floor for the Nikkei."
In light trade, the benchmark Nikkei <> added 17.65
points to 10,104.91 by midday, after starting the day slightly
lower.
It edged down 0.01 percent the previous day as investors
booked profits after it climbed 11.5 percent during a nine-day
run to Monday, its longest stretch of gains since 1988.
The broader Topix <> was flat at 930.17.
Some 950 million shares changed hands on the Tokyo exchange's
first section, below last week's morning average of 1 billion.
Declining stocks outnumbered advancing ones, 760 to 728.
CANON, JFE RISE
Shares of Canon, which raised its profit outlook on cost cuts
but maintained a cautious view on demand for office equipment,
gained 1.5 percent to 3,420 yen. []
JFE climbed to 3,690 yen, extending gains after rising 7
percent on Tuesday on higher output and an improved shipbuilding
business. []
Its recurring loss for April-June came to 67.3 billion yen,
compared with a profit of 112.10 billion yen a year earlier and
it forecast an annual recurring profit of 40 billion yen.
"Although the actual earnings figures were not good, the
steelmaker's outlook boosted hopes for an earnings recovery for
the second half of the business year," said Kenichi Hirano,
operating officer at Tachibana Securities.
Chip-linked shares continued to be in favour, with
chip-tester maker Advantest <6857.T> climbing 3.8 percent to
1,990 yen and Tokyo Electron <8035.T> adding 1.7 percent to 4,720
yen.
Shares of Nippon Steel <5401.T>, which is reporting results
later in the day, advanced 2.1 percent to 385 yen.
But oil explorer Inpex <1605.T> slipped 1.8 percent to
713,000 yen after U.S. crude futures dropped below $67 a barrel
on Wednesday, extending the previous day's decline after industry
data showed a larger-than-expected increase in crude inventories
last week. []
(Editing by Edwina Gibbs)
