Nikkei edges higher, but lacks direction before Fed

* Nikkei searching for direction before Fed meeting this week

* Defensive shares up, energy down after Friday oil fall

TOKYO, June 22 (Reuters) - Japan's Nikkei stock average edged up 0.1 percent on Monday led by defensive shares such as drugmakers, but trade was largely directionless as uncertainty grew about whether stocks are due for a correction.

Chugai Pharmaceutical (4519.T) climbed on a brokerage upgrade, while food and beverage firms such as Asahi Breweries (2502.T) gained as well.

The benchmark Nikkei on Friday posted its worst week in three months, but market analysts said trade was likely to be narrow ahead of key events such as 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."

Market players have said that 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, it would not be surprising if it took a breather and consolidated -- perhaps until mid-July, when companies start to report earnings.

"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.

The benchmark Nikkei .N225 rose 10.35 points to 9,796.61, while the broader Topix gained 0.2 percent to 921.19.

Chugai Pharmaceutical climbed 2.1 percent to 1,840 yen, outpacing a 0.7 percent gain in the pharmaceutical sub-index .IPHAM.T, after Nikko Citigroup analyst Hidemaru Yamaguchi raised the target price for Chugai to 2,300 yen from 1,600 yen and upgraded the shares to "buy" from "hold" in a research note last Friday.

In the note, Yamaguchi cited factors such as increased expectations for anticancer drug Avastin and influenza drug Tamiflu.

Eisai Co Ltd (4523.T) rose 1.2 percent to 3,410 yen and Shionogi (4507.T) gained 1.8 percent to 1,834 yen.

Other defensive shares that fared well were Asahi Breweries, which rose 1.7 percent to 1,381 yen and fellow brewer Sapporo Holdings (2501.T).

Resource-linked shares such as trading houses slid after crude oil fell over 2 percent in the previous session, though it was rising on Monday, and copper remained weak.

Mitsui & Co (8031.T) fell 4.2 percent to 1,129 yen and Mitsubishi Corp (8058.T) dropped 2.3 percent to 1,784 yen. (Reporting by Elaine Lies; Editing by Joseph Radford)