*Nikkei up 0.4 pct, exporters, financials gain
*Market still cautious about earnings and ahead of holiday
*Inpex extends losses on overnight fall in oil price
(Adds stocks and comments)
By Taiga Uranaka
TOKYO, July 18 (Reuters) - Japan's Nikkei average rose 0.4
percent on Friday, as a softer yen lifted exporters like Honda
Motor Co <7267.T> and financial shares gained after JPMorgan's
<JPM.N> profit fell less than expected.
But the benchmark slipped back after flirting with the
psychologically important 13,000 mark on caution following some
disappointing U.S. earnings results released after the bell and
ahead of a three-day weekend.
"Investors haven't let down their guard. Bad earnings from
the U.S. came out after the bell and there is growing nervousness
about Japanese corporate earnings that begin next week," said
Katsuhiko Kodama, senior strategist at Toyo Securities.
"On top of that, we have a three-day weekend and Citi
earnings tonight," he said.
Japanese markets are closed on Monday for a national holiday.
The benchmark Nikkei <> ended the morning up 50.34
points at 12,938.29 after rising as high at 12,999.64 at one
point. It has not topped 13,000 since Tuesday.
The broader Topix <> gained 0.3 percent to 1,267.59.
"What's happening is an unwinding of short positions, not
buildup of long positions," said Masanobu Takahashi, chief
strategist at Ichiyoshi Securities.
"The Japanese market has been more resilient when other
markets fall, but it also lags when others are climbing. Japanese
stocks do not have any compelling appeal now," he said.
U.S. stocks soared on Thursday on a sharp drop in oil prices
and several unexpectedly strong earnings reports.
But after the close, Merrill Lynch <MER.N> reported a much
larger-than-expected $4.89 billion quarterly loss on soured
holdings of mortgages and other risky debt, and unveiled plans to
sell billions of dollars of assets to shore up capital.
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BANKS UP
Among exporters, Honda Motor gained 1.8 percent to 3,460 yen,
and high-tech device maker TDK Corp <6762.T> rose 1.9 percent to
6,360 yen, becoming the two top contributors to the Nikkei.
Japan's major banks extended gains, with top lender
Mitsubishi UFJ Financial Group <8306.T> up 2.2 percent at 976 yen
after JPMorgan said its profit fell less than expected on
resilient stock and bond underwriting revenue.
Brokerages also added to the previous day's sharp gains.
Nomura Holdings Inc <8604.T> rose 1.6 percent to 1,556 yen and
Daiwa Securities Group <8601.T> also gained 1.6 percent to 937
yen.
Nomura said on Friday it will launch full-scale operations in
India, expanding into stock trading and asset management.
[]
Oil and gas field developer Inpex Holdings Inc <1605.T>
extended losses for the third day, falling 4.3 percent to 1.12
million yen after U.S. crude oil futures dropped to the lowest
level in six weeks on Thursday.
Trade was thin, with 853 million shares changing hands on the
Tokyo exchange's first section, compared with last week's morning
average of 926 million.
Decliners outnumbered advancers by 816 to 745.
(Editing by Edwina Gibbs)
