July 25, 2017 / 2:09 AM / a year ago

Japan's Nikkei inches up, caught in tight range before Fed meeting

TOKYO, July 25 (Reuters) - Japan’s Nikkei share average inched up on Tuesday as the market found its footing following the previous day’s fall, although the index was confined in a narrow range ahead of the U.S. Federal Reserve’s policy meeting.

The Nikkei was up 0.05 percent at 19,987.25, drawing mild support as the yen pulled back from a five-week high versus the dollar. The index had dropped to a two-week low of 19,901.88 the previous day, hit by the yen’s rise.

Much investor focus was on the Fed’s two-day meeting due to start later on Tuesday, and its potential impact on financial markets.

“The equity market is on hold at the moment, waiting for the Federal Open Market Committee (FOMC) outcome. The key is which direction currencies take in response to the Fed,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.

“There won’t be a post-meeting press conference this time and a concern is the Fed coming through as too subdued. That could trigger a yen surge and in turn push down the Nikkei towards 19,500.”

Japanese Prime Minister Shinzo Abe’s flagging support ratings also continued to cap equities, although this was a factor that will likely take months to play out, Akino added.

The broader Topix was flat at 1,621.06.

Exporters were buoyed as the yen’s appreciation stalled for the time being.

Tokyo Electron rose 1.1 percent and Panasonic Corp edged up 0.4 percent. Mazda Motor Corp climbed 1.5 percent, Nissan Motor Co added 0.5 percent and Toyota Motor Corp gained 1.5 percent.

Drugmaker Mitsubishi Tanabe Pharma Corp was up 2.3 percent following news that it has agreed to purchase Israel’s Neuroderm for $1.1 billion as part of a strategy to expand its U.S. business.

Fellow drugmaker Shionogi & Co Ltd climbed 2.4 percent after the company announced that it would submit a new influenza drug application to regulators later in the financial year following positive results in trials.

Showa Denko KK dropped 4.7 percent after the chemical maker on Monday revised down its net and recurring profit forecasts for the year through December 2017.

Mobile carrier NTT Docomo lost 1.3 percent after the Nikkei business daily reported that its April-June group operating profit likely sank nearly 10 percent on year because of competition from budget carriers. (Reporting by Shinichi Saoshiro; Editing by Eric Meijer)

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