Nikkei edges up amid reports of tax-hike delay, weaker yen

TOKYO, May 27 (Reuters) - Japanese stocks rose in thin trade on Friday morning amid steady yen weakness and media reports that Prime Minister Shinzo Abe would delay by two years a sales tax hike scheduled to go into effect in April 2017.

The Nikkei share average edged up 0.4 percent to end the morning session at 16,846.32. Japan’s benchmark index is on course to end the week about one percent higher.

Market players said the index’s gains probably had more to do with recent gains on Wall Street and firmer expectations that the Fed could raise interest rates as soon as June, reflecting optimism over the state of the economy.

“I think it’s hard to argue that the weakness we’ve seen in Japan this year has had to do with fears of a VAT hike and I think investors are much more focused on world events,” said Stefan Worrall, director of Japan equity sales at Credit Suisse.

“Right now, Japan is at the mercy of how China risks evolve, how expectations regarding Fed rate hikes evolve, and how the Brexit vote evolves.”

Toshiba Corp shares soared 9.4 percent after the embattled electronics firm had its stock’s rating raised to “overweight” from “underweight” by JP Morgan.

Automotive company Aisin Seiki Co Ltd also outperformed after forecasting a strong operating profit forecast for the year through March 2017, despite the impact of the Kumamoto earthquake that affected its operations. The company’s stock jumped 6.6 percent.

A broad swath of shares that benefit from a weaker yen due to higher exports and inbound tourism sales also outperformed. Sharp Corp rose 3.6 percent while automaker Suzuki Motor Corp and cosmetics maker Shiseido Co Ltd each gained 0.8 percent.

The broader Topix rose 0.5 percent to end the morning session at 1,349.82 and JPX-Nikkei Index 400 gained 0.6 percent to 12,183.24. (Reporting by Joshua Hunt; Editing by Simon Cameron-Moore)