Nikkei heads for best January performance since 1999
* Nikkei up 0.3 pct, poised for best January since 1999 * Canon falls on weaker outlook, president stepping down * Fujifilm sinks after cutting forecasts * SMFG rises after keeping its annual net profit forecast By Dominic Lau and Mari Saito TOKYO, Jan 31 (Reuters) - Japan's Nikkei share average was on track to snap a three-day losing run on Tuesday and headed for its best January performance since 1999, as investors took cues from optimism about the U.S. economy and shrugged off weaker corporate earnings results. "There is a ceiling among market players of exhaustion of bearishness. A lot of (Japanese) stocks are undervalued. A lot of Europe's pessimism has been priced in," said Naomi Fink, head of Japan strategy at Jefferies Japan. "Meanwhile, you see some slightly better data out of the U.S., so there is an incipient signal of recovery of the U.S. For Japan, that means an incipient signal of recovery of overseas demand." Highlighting the underlying resilience in the market, U.S. stocks on Monday cut losses in an afternoon rally despite stalled talks on Greece's debt swap deal, which is key to avoid a messy default, and concerns that Portugal will follow in Athens' footsteps and require another bailout. The Nikkei was up 0.3 percent at 8,822.60 in midmorning trade. The benchmark is up 4.3 this month, on track for its best January performance since 1999. The broader Topix added 0.1 percent to 757.95 on Tuesday. Sumitomo Mitsui Financial Group rose 2.4 percent after its third-quarter earnings, which Morgan Stanley described as "stable earnings in a difficult environment." Mizuho Financial Group and Mitsubishi UFJ Financial Group both added 0.9 percent. Kenichi Hirano, operating officer of Tachibana Securities, was cautious, however. "Month-ending window dressing may be behind this market uptick today. Earnings results have so far been fairly disappointing and it is difficult to see how much of an improvement these export-dependent companies will do in the next quarter," he said. Canon Inc on Monday forecast weak earnings growth and said its president was stepping down. Its shares were the top weighted loser on the Nikkei, down 3.6 percent. Fujifilm Holdings tumbled 6.2 percent after it cut its operating profit forecast by 19 percent and net profit estimate by 48 percent. According to Thomson Reuters StarMine data, out of the 18 Nikkei companies that have reported quarterly figures, 61 percent of them came in below market expectations. That compared with 36 percent of the S&P 500 companies. JPMorgan Asset Management maintained Japanese equities as "overweight" in its multi-asset portfolios, however. "Its economy is expected to enjoy the second fastest growth in 2012 among the G-7 nations, equal with Canada and just behind the U.S.," the asset management firm said in its weekly note. "Earnings growth also compares favourably with other markets while our quant models have picked up Japan's attractive relative growth momentum." Topix companies are expected to post an average 29.6 percent year-on-year earnings per share growth in 2012 after an expected 2.7 percent rise last year, Thomson Reuters I/B/E/S data showed. That compares with an average rise of 9.3 percent for S&P 500 companies in 2012 after an estimated 14.9 percent year-on-year increase in 2011.