Nikkei edges up as Sapporo and Nissan gain

* Nikkei edges up after worst week in three months

* Caution dominates ahead of Fed meeting

* Sapporo soars, Nissan climbs

* Pioneer slides

By Elaine Lies

TOKYO, June 22 (Reuters) - Japan's Nikkei stock average edged up 0.1 percent on Monday, with brewer Sapporo Holdings (2501.T) and car maker Nissan Motor Co (7201.T) making robust gains but caution about a possible correction for overall market remained strong.

Pioneer Corp (6773.T) fell 5.7 percent after the struggling electronics maker said it would postpone a plan to raise 2.5 billion yen by selling new shares to Honda Motor (7267.T) as it was talking with potential additional financial partners. [ID:nT104946]

The benchmark Nikkei on Friday posted its worst week in three months, but market analysts said trade was likely to be narrow ahead of the Federal Reserve board meeting later this week.

"There's no real reason to sell, but there are also very few reasons to buy," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

"The Nikkei, as with other stock markets, is waiting for signs about whether the recent rally has ended or whether it will continue."

The Federal Reserve's Open Market Committee meets on Tuesday and Wednesday, with markets waiting to see what is said about the economic outlook, a rise in Treasury debt yields, and whether the Fed makes any move to expand or extend its debt buyback programme. [ID:nN19521340]

"There's a lot of concern about rising U.S. interest rates, so markets are watching this with keen attention," said Noritsugu Hirakawa, a strategist at Okasan Securities. The benchmark Nikkei .N225 gained 9.76 points to 9,796.02 in very light trade after falling 3.5 percent last week, its worst weekly performance in three months.

The broader Topix rose 0.2 percent to 920.93.

Market players have said the market may be due for a breather given the Nikkei's steep gains during its three-month rally, which lifted it some 45 percent from a March 10 low to an eight-month high on June 12. This may last until mid-July, when companies start to report earnings, they add.

"I think nobody doubts that the market has bottomed out, but for us to see real recovery we need signs of hope in macroeconomic indicators," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

SAPPORO SOARS