* FDA's warning on testing violations dents medical device makers
* GS Yuasa soars on report it will start producing next-generation lithium-ion batteries
By Ayai Tomisawa
TOKYO, Aug 18 (Reuters) - Japanese shares were up modestly on Tuesday morning after U.S. stocks rose, but investors remained cautious amid volatility in the Chinese market after last week's surprise devaluation of its currency.
The Nikkei share average rose 0.1 percent to 20,635.58 in midmorning trade.
In the Japanese market, investors took heart from strong April-June earnings, especially domestic demand-related stocks, but investors have become risk-averse after Beijing rattled global markets by devaluating the yuan last week.
"Such good news is offset by concerns about a slowdown in the Chinese economy," said Takuya Takahashi, a strategist at Daiwa Securities.
Investors' risk-averse stance is reflected in thin trading volume and turnover over recent sessions.
On Monday, only 1.709 billion shares changed hands for the Topix, the lowest level since mid-June while its turnover sank to its weakest level since early April.
Outperforming the market was GS Yuasa Corp which soared 2.5 percent after the Nikkei business daily reported that in 2017 it will start producing next-generation lithium-ion batteries to be used in electric vehicles. The company has been co-developing next-generation lithium-ion batteries with Germany's Robert Bosch GmbH and Mitsubishi Corp since they established a joint venture last year.
Elsewhere, individual company news steered investor activity.
Olympus Corp dropped 2.7 percent after the U.S. Food and Drug Administration warned that medical device makers had skirted a host of requirements linked to 'superbug' infections.
Violations range from not properly evaluating cleaning, sterilization and testing procedures to failure to report infections and other problems, FDA said in warning letters to companies. Fujifilm Holdings Corp and Pentax Medical, a unit of Hoya Corp were also cited for violations in their marketing applications for the devices, known as duodenoscopes.
Fujifilm shed 0.7 percent while Hoya declined 1.7 percent.
Don Quijote fell 4 percent after its lower-than-expected operating profit for the year ending June 2016 disappointed investors.
The broader Topix gained 0.2 percent to 1,677.02 and the JPX-Nikkei Index 400 advanced 0.2 percent to 15,106.87.
Editing by Shri Navaratnam