Nikkei inches up for 5th day, caution limits gains

TOKYO (Reuters) - Japan's Nikkei stock average ended marginally higher on Friday to extend gains into a fifth day, with investors reluctant to actively buy stocks ahead of a Group of 20 meeting and a long weekend in the United States.

Market watchers said worries over unrest in the Middle East also limited gains in the Nikkei .N225, which closed up 0.1 percent. It has rallied 6 percent so far this year, making it the best-performing Asian market.

"It's an obvious breather after the market has gained so much recently," said Takashi Hiroki, chief strategist at Monex Inc.

"The time for such a break is perfect, because investors want to re-adjust their positions according to what happens in the Middle East, with the G20 summit and after a longer market break in the U.S.," he said.

U.S. markets will be closed on Monday for George Washington's birthday. A two-day meeting of finance ministers and central bankers of G20 economic powers starts in Paris on Friday.

The Nikkei .N225 rose 6.16 points to 10,842.80, gaining for a fifth day to mark the longest winning streak since June. The broader Topix index .TOPX finished 0.1 percent lower at 973.60, with declining shares outnumbering gainers 835 to 673.

Volume was moderate, with around 2.16 billion issues changing hands on the Tokyo Stock Exchange's main board, exceeding two billion shares for a tenth day. Average daily volume for the week came to 2.26 billion, up from last week's 2.16 billion.

Analysts said buying by foreign investors, which have been pouring funds into Japanese stocks on the view they are undervalued, was helping to absorb selling from domestic institutions.

Japanese stocks are trading at 1.1 times current book value, below the global equity markets average of 2 times, data from Thomson Reuters StarMine showed.

"As we enter March when Japanese institutional investors normally aggressively sell to lock in gains ahead of earnings announcements and as the Nikkei nears the 11,000 mark, some sort of correction seems inevitable in the mid-term," said Masayuki Otani, chief market analyst at Securities Japan Inc.

INPEX UP, HEIWA TUMBLES

Energy and commodities stocks, such as Japan's biggest oil and gas developer Inpex Corp (1605.T), outperformed as turmoil in the Middle East turmoil sent the price of oil higher.

Inpex gained 1.4 percent to 587,000 yen.

Heiwa Real Estate (8803.T) fell 5.7 percent to 249 yen after it said it plans to raise 13.4 billion yen ($1.6 million) through a new share issue that will see Mitsubishi Estate (8802.T) raise its stake in the property firm to about 10 percent.

Circle K Sunkus (3337.T) rose 3.9 percent to 1,411 yen after the operator of convenience store chain raised its operating profit forecast by 14 percent for the year to February, thanks to price rises for cigarettes and strong sales of boxed meals.

Shares in electronics maker JVC Kenwood (6632.T) extended gains, climbing 5.8 percent to 438 yen, after the firm's CEO told Reuters it hopes to lift a warning about its viability as a going concern at the end of the current financial year in March.

Separately, the company has asked its top shareholder Panasonic Corp (6752.T) not to offload its stake in it for the time being and believes it has gained Panasonic's understanding, its head said.

(Editing by Nathan Layne)