* Investors take profits on Topix shares
* Softer yen aides some exporters; BOJ expected to ease next
* Kansai Electric Power sags on report it will cancel
By Sophie Knight
TOKYO, Oct 23 Japan's Nikkei share average edged
up to mark its seventh straight day of gains, its longest
winning streak since July 2011, after an increasingly soft yen
continued to fuel exporters' gains.
Exporters rose as the yen hit a three-month low of 80.02 to
the dollar in the morning session. Sources said the Bank of
Japan was leaning towards easing monetary policy again next
week, with policymakers discussing steps in addition to a
further increase in its asset-buying scheme.
Among exporters, industrial robot maker Fanuc Corp
gained 1.9 percent, Nikon Corp rose 1.6 percent and
Panasonic Corp added 0.6 percent.
The Nikkei inched up 3.5 points to 9,014.25 after rising as
much as 9,075.58, a four-week high.
Although the benchmark has lost momentum after last week's
steep climb of 5.5 percent, when it logged its best weekly
performance in almost a year, some analysts think it could hold
on to its gains until the BOJ meeting on Oct. 30.
"Unless the yen suddenly strengthens or the Nikkei snaps its
75-day moving average, which is around 8,855 today, it will
continue to be strong. If it falls before that it's more likely
to be an adjustment than an authentic reversal," said Yoshihiro
Ito, chief strategist at Okasan Online Securities.
"However, it remains to be seen whether earnings have really
been priced in or not."
The benchmark sagged 3.7 percent two weeks ago on fears that
most Japanese companies would cut their forecasts as sales are
hit by a global slowdown and particularly weak demand in China,
where a territorial dispute provoked boycotts of Japanese goods.
But last week's gains indicated that many investors thought
the sell-off was overdone, as they bought back even companies
that cut annual guidance as the cuts were not as deep as feared.
"We are in the middle of a range here - 8,500 would probably
be a buy, 9,200 would probably be a sell without any real move
on the currency. If the currency gets through 80 (yen to the
dollar) convincingly, that changes a lot of things," said a
senior trader at a foreign bank.
He added the flows were light, indicating investors were "a
bit confused" over the direction of the market after recent
The trickle of profit reports on Tuesday as Japan's earnings
season shifts into a higher gear continued to move individual
stocks. Fuji Heavy Industries Ltd climbed 3.8 percent
to a 20-month high after lifting its operating profit forecast
for the final half ended September by 34 percent.
Kagome Co Ltd fell 2.9 percent to a three-month low, after
the ketchup and tomato products manufacturer cut its operating
profit forecast, after previously hiking it in July as a tomato
diet became popular in Japan, helping the stock to a three-year
high in September.
The outlook for Japanese corporate earnings remains weak.
According to Thomson Reuters Datastream, Japanese companies'
one-month earnings momentum - analysts' earnings upgrades minus
downgrades as a total of estimates - has deteriorated further to
-12.2 percent from -6.7 percent last month.
The pace of deterioration for the S&P 500 is not as
pronounced. It worsens to -3 percent from -2.3 percent in
September, according to Datastream.
The benchmark Nikkei is up 6.6 percent this year, lagging a
14 percent rise in the U.S. S&P 500 and an 11.6 percent
gain in the pan-European STOXX Europe 600 index.
INVESTORS LOCK IN GAINS
The broader Topix index lost 0.6 percent, which
analysts attributed to profit-taking after the index's 5 percent
gain last week.
Hitachi Ltd dropped 3.4 percent and was the
third-most traded stock on the main board after outperforming
the benchmark with a gain of 8.9 percent last week.
Utilities lost 6.7 percent, the weakest subindex
of the day, after local media said Kansai Electric Power Co Inc
will not pay its previously forecast annual dividend of
60 yen for the year ending in March 2013, due to soaring costs
of imported oil and gas as the majority of its nuclear reactors
Kansai Electric Power sank 12.9 percent.
"I think the stock price will recover. I can't imagine there
were too many shareholders actually thinking they were going to
pay a dividend when they are so far in the red," said Hiroyuki
Mutsuro, head of execution support at Mizuho Securities.
Kansai Electric, which derived 50 percent of its power from
nuclear before its reactors were taken offline for routine
checks following the accident at the Fukushima nuclear plant
last year, was expected to report a net loss of 125 billion yen
($1.57 billion) for the six months ended in September, according
to Jiji news agency.