* Nikkei rises 0.1 pct, Topix up 0.2 pct * Weaker yen powers auto shares * Investors lock in profits on recent gainers before weekend By Tomo Uetake TOKYO, Sept 20 (Reuters) - The Nikkei average edged up to hold around a two-month high on Friday morning, in part helped by gains in automakers after the yen retreated against the dollar as the U.S. Federal Reserve's surprise decision to keep cheap money flowing wears off. The benchmark Nikkei ended the morning session 0.1 percent higher at 14,778.75 after earlier hitting 14,816.65, its highest level since July 23. The index added to the 1.2 percent rise on Thursday, and is up 2.6 percent for the week so far for a third straight week of gains. The broader Topix gained 0.2 percent to 1,218.23. "This has been a very positive week for Japan and risk assets in general. First, we had (Lawrence) Summers' exit the race to head the Fed, and the surprise Fed decision not to taper gave another boost for risk appetite," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo. Markets in China and South Korea were closed for the mid-autumn holiday, while Japanese markets will shut for a similar holiday on Monday. The Fed's decision on Wednesday to delay a decision on tapering its massive bond-buying stimulus sent the dollar skidding broadly and triggered a global rally in riskier assets. Investors have since paused to reflect on the Fed's policy outlook, with upbeat U.S. data overnight underscoring expectations that the stimulus cut will not be delayed for too long. As a result, the dollar erased all of its Fed-induced losses against the yen to last trade at 99.41 yen, well off Wednesday's low of 97.76. Exporters benefited from the yen's retreat, with Toyota Motor Corp rising 0.8 percent to be the third-most traded stock on the main board. Rival Mitsubishi Motors Corp jumped 1.8 percent, while Fuji Heavy Industries Ltd advanced 1.5 percent. A weak yen strengthens exporters' competitiveness overseas and bumps up their dollar earnings when repatriated. "It's retail investors who are buying up shares today, but this doesn't mean much as it's just before the long weekend and many Asian markets are closed for holiday," Credit Suisse's Worrall said. On the downside, recent gainers such as shippers, constructors and warehouse operators succumbed to profit-taking ahead of the long weekend. The sea transport sector subindex shed 2.7 percent and was the worst sectoral performer. The Nikkei has surged 42 percent since the start of the year, buoyed by the government's aggressive fiscal and monetary stimulus aimed at pulling the world's third-largest economy out of two decades of stagnation.