July 27, 2018 / 3:45 AM / 24 days ago

Nikkei up slightly; focus on global trade, BOJ meeting

* Nikkei rises 0.2 pct but on track for weekly loss

* Kao gains on solid Apr-June results

* Nomura plunges after Apr-June profit tumbles 91 pct

* Komatsu, Hitachi to announce earnings on Friday

By Tomo Uetake

TOKYO, July 27 (Reuters) - Japanese shares bounced modestly on Friday, taking some comfort from signs of rapprochement between the United States and Europe over trade issues, though investors remained cautious ahead of next week’s Bank of Japan policy review.

The benchmark Nikkei share average rose 0.22 percent to 22,635.59 by the midday break.

“Many investors are sitting on the sidelines, instead of betting on either a fall below 22,000 or a rise above 23,000 right now,” said Yasuo Sakuma, chief investment officer at Libra Investments.

“The Nikkei seems to have found a comfortable level in the mid-22,000s.”

While investors were comforted by an informal agreement between the European Union and the United States to hold off on tariffs, speculation about changes to the Bank of Japan’s policy at next week rates review checked optimism.

The EU-U.S. news sent the MSCI’s gauge of stocks across the globe to four-month highs on Thursday, with European car maker shares jumping on easing fears of a transatlantic trade war.

Cyclical shares, which had been bruised by concerns over a Sino-U.S. trade war, led the gains.

Among them, chip maker Tokyo Electron and Canon Inc shed 0.55 and 0.6 percent, respectively, after the earnings announcement disappointed investors.

Nomura Holdings slumped 6.0 percent after Japan’s biggest brokerage and investment bank posted its worst quarterly performance in more than two years.

Other notable movers include internet ad firm Septeni Holdings, which dived 20.8 percent to become the worst performer among all Tokyo-listed stocks, after Facebook suffered the biggest one-day wipeout in U.S. stock market history.

Heavyweight Fast Retailng fell for the fifth trading day in a row, down 0.9 percent, hit by speculation the BOJ could wind back its purchases in the Nikkei-linked exchange-traded funds.

Reuters and other media reported over the weekend that the BOJ could debate changes in its monetary policy at its meeting early next week, with potential tweaks to its interest rate targets and stock-buying techniques on the table.

Katsunori Kitakura, lead strategist at Sumitomo Mitsui Trust Bank, said he doesn’t expect any changes to BOJ policy at next week’s meeting.

However, “there is a possibility that the BOJ will make an announcement that it has begun discussions to provide suitable ranges for a target yield curve after the coming meeting,” he said.

The broader Topix gained 0.46 percent to 1,773.90, while the JPX-Nikkei Index 400 was up 0.42 percent at 15,674.76.

The fiscal first-quarter earnings season is in full swing this week, with Komatsu Ltd and Hitachi Ltd announcing results later on Friday. (Reporting by Tomo Uetake Editing by Shri Navaratnam)

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