* Caterpillar's robust results lift Komatsu, Hitachi Construction
* Shin-Etsu's strong forecast attracts buyers, then profit-takers
* Nintendo, others up on strong electronic component demand
* Investors await Fed decision later in the global session
By Ayai Tomisawa
TOKYO, July 26 (Reuters) - Japanese stocks rose on Wednesday as solid gains on Wall Street lifted sentiment, while Caterpillar's brisk earnings whetted investors' appetite for companies such as Komatsu and Hitachi Construction.
Some analysts warned that profit-taking was likely in the afternoon session, as investors remained cautious ahead of a U.S. Federal Reserve monetary policy decision later in the day.
The Nikkei share average was up 0.5 percent at 20,048.62 at the end of morning trade.
Japan's construction equipment makers attracted buying, with Komatsu Ltd surging 2.8 percent and Hitachi Construction Machinery Co soaring 3.4 percent after Caterpillar Inc, the world's largest construction and mining equipment maker, beat expectations and raised its full-year forecast for the second time.
Japan Inc has kicked off April-June earnings season, and investors have taken heart from brisk results from frontrunners such as Yaskawa Electric Corp, which gave the market an upbeat surprise last week.
On Wednesday, the world's largest silicon wafer maker Shin-Etsu Chemical soared as much as 3.4 percent to a record high, after it said it expects a 12.3 percent rise in its full-year operating profit for the fiscal year through March.
But investors wasted no time in taking profits on the stock, sending its shares down 1.6 percent by midmorning.
"We're still in the second quarter, and the company already shows that it's on track to achieve its full-year goal and that is raising expectations for certain sectors as well as the overall mood," said Takuya Takahashi, an equity strategist at Daiwa Securities.
Takahashi also noted that with the market focused on the Fed decision, gains may be capped in the afternoon.
The Fed is widely expected to keep interest rates unchanged at its two-day meeting. Investors will be watching for any clues on whether it may raise rates again this year, and when it will begin paring its massive bond portfolio.
Electronic component makers were also among Wednesday's winners after the Nikkei business daily reported that demand for electronic components is recovering. Combined orders at six major Japanese manufacturers for the April-June quarter expanded about 15 percent from a year earlier, the Nikkei said, thanks to strong buying of parts for use in smartphones and automobiles, as well as for game consoles for Nintendo Co.
But gains in those shares were also trimmed as investors grew cautious before the Fed's decision, with Murata Manufacturing Co flat after gaining 2.2 percent.
Nintendo was up 1.6 percent after gaining as much as 2.2 percent.
The broader Topix gained 0.3 percent to 1,621.12. (Editing by Lisa Twaronite & Shri Navaratnam)