Nikkei ticks up on bargain-hunting, cautious before Bernanke

A man looks down as he walks past an electronic board displaying the closing price of Japan's Nikkei share average outside a brokerage in Tokyo August 22, 2011.

TOKYO (Reuters) - Japan's Nikkei average ticked up on bargain-hunting on Friday and marked its first weekly gain in five weeks, with investors awaiting a speech from Federal Reserve Chairman Ben Bernanke for clues on what steps the U.S. central bank will take to support the economy.

Investors have also been latching onto stocks that have lost much ground this month. Auto stocks surged in the previous session and on Friday, Elpida Memory 6665.T, the world's No.3 maker of dynamic random access memory chips, soared, also helped by a recovery in DRAM spot prices.

Selling from foreign investors -- which has helped to push down Nikkei more than 10 percent so far this month -- continued but some market players said their selling seems to be slowing.

"Last week, the market fell unless there were clear buying factors. This week that is no longer the case," said Soichiro Monji, chief strategist at Daiwa SB Investments, adding that he thought the market was oversold.

The benchmark Nikkei .N225 rose 0.3 percent to 8,797.78 for a weekly gain of 0.9 percent. It hit a five-month low of 8,619.21 earlier this week.

The broader Topix index .TOPX gained 0.6 percent to 756.07.

"Some investors had increased cash positions earlier this month. Now they are putting back some of their money on stocks ahead of the end of month, though not in a big amount," said Masato Futoi, head of cash equity trading group.

Markets came into the week thinking Bernanke may announce a third round of asset purchases or some other extraordinary policy move later on Friday but these expectations have been dialed back somewhat.

Bernanke is scheduled to speak on Friday at 10 a.m. New York time.

Tokyo shares' have tumbled this month on fears of a slowdown in the U.S. economy and European debt woes but the market has fallen far enough that valuations look very attractive.

"The index remains below 9,000, and this is the level where retail investors buy stocks with attractive valuations," said Hideyuki Okoshi, general manager at Chibagin Securities.

Shares listed on the Tokyo stock exchange's first section trade around book value, while shares on the S&P 500 are trading at 1.9 times their book value.

Elpida surged 17.6 percent to 535 yen after having slid more than 40 percent in the one month to Thursday's close, battered by the company's move to raise capital.

A trader at a foreign brokerage said that a number of factors were lifting the shares, including Wednesday's news about Abu Dhabi state-owned fund Aabar joining South Korea's STX Corp (011810.KS) to bid for Hynix Semiconductor (000660.KS) and a rise in chip spot prices.

Kyowa Hakko Kirin (4151.T) rose 3.3 percent to 785 yen after the company said it will buy back up to 4.4 percent of its own shares while KDDI Corp (9433.T) rose 2.8 percent to 557,000 yen on two brokerage upgrades to "outperform" from "neutral".

Volume was relatively high, with 1.9 billion shares changing hands on the Tokyo stock exchange's main board, higher than last week's average of 1.7 billion shares. Advancing shares outnumbered declining shares by 1,100 to 410.

(Additional reporting by Ayai Tomisawa; Editing by Edwina Gibbs)