RPT-CORRECTED-Japan's Nikkei bounces back after fall, Sharp jumps

Wed Jan 16, 2013 9:33pm EST

(Repeats to fix word in headline, corrects details of Bank of
Japan purchases of ETFs in paragraph 11)
    * Sharp shoots up on news of TV tie-up for China
    * Boeing suppliers lag
    * Exporters reclaim some of previous session's losses

    By Sophie Knight
    TOKYO, Jan 17 (Reuters) - Japan's Nikkei share average rose
on Thursday morning after suffering its biggest one-day drop in
eight months on Wednesday, but airlines and suppliers to Boeing
dropped after its Dreamliner passenger jet was grounded due to
safety issues. 
   Struggling TV maker Sharp Corp was also in focus as
it shot up 7.3 percent after the Nikkei business daily reported
it is in the final stages of talks with Lenovo Group Ltd
 to tie up its television business in China. Sharp was
the most-traded stock on the main board by turnover 
    Suppliers to Boeing Co dropped after the U.S. Federal
Aviation Administration said on Wednesday it would temporarily
ground the new 787 jet after a second incident involving battery
failures led to an emergency landing in Japan. 
    GS Yuasa Corp, which makes the batteries, dropped 5
percent, while other suppliers Mitsubishi Heavy Industries Ltd
, Toray Industries Inc, and Osaka Titanium
Technologies Co slipped between 0.8 percent and 2.1
percent.
    The Nikkei gained 0.8 percent to 10,683.61, helped
by exporters such as Toyota Motor Corp clawing back a
little of the losses they saw on Wednesday, when the benchmark
tumbled 2.6 percent on a firmer yen.
    Toyota rose 1.9 percent while Honda Motor Co Ltd 
and Mazda Motor Corp gained 3.2 and 2.5 percent,
respectively. But defensive sectors such as pharmaceuticals
 and food companies were also strong,
suggesting weaker risk appetite.
    "The yen has weakened a bit after firming considerably
yesterday, which is helping the market," said Hirokazu Fujiki,
manager of investment strategy at Okasan Securities.
    "But as we're in wait-and-see mode for the BOJ, I don't
think volume is going to be that impressive today. The trouble
is I don't think they will be able to pull any surprises beyond
announcing the inflation target everyone already expects." 
    The Bank of Japan, which will hold its monthly policy
meeting on Jan. 21-22, has come under pressure from the
government to introduce aggressive easing to energise the ailing
economy and reach a 2 percent inflation rate. 
    That pressure contributed to a weaker yen, potentially
boosting the profits of exporters once repatriated, helping the
Nikkei sprint up around 26 percent over the past two months. 
    The BOJ bought 22.7 billion yen ($257 million) worth of
exchange-traded funds to prop up the market on Wednesday, a
common step when the broader Topix loses more than 1
percent in the morning session. The Topix had dropped 2 percent
by the end of the day. 
    By mid-morning on Thursday, the index was up 0.7 percent at
894.48.   
   ($1 = 88.4950 Japanese yen)

 (Additional reporting by Sophie Knight, Ayai Tomisawa; Editing
by Jacqueline Wong)
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