* Yonekyu jumps after report of a merger with Itoham
* Toshiba stumbles after reporting a quarterly loss, put under watch list
* Market awaits BOJ outcome
By Ayai Tomisawa
TOKYO, Sept 15 (Reuters) - Japanese stocks rose on Tuesday morning as food processing firms rallied on a report of a merger, while most investors were fairly relaxed ahead of the outcome of the Bank Of Japan’s two-day policy meeting.
Food stocks rose 1.5 percent and were the top performer on the board.
The gains were sparked by second-largest meat processor Itoham Foods Inc jumping 4.6 percent after the Nikkei reported that it and seventh-ranked Yonekyu Corp are planning a merger in what would be the biggest vendor of ham and sausage in the country. Yonekyu rocketed 12 percent.
Expectations of more consolidation in the food industry lifted other food processors such as fishery product makers Nippon Suisan Kaisha and Toyo Suisan Kaisha, which soared 1.9 percent and 2.2 percent, respectively.
Bucking the strength, Toshiba Corp stumbled 6.9 percent after it reported a quarterly loss. The Tokyo Stock Exchange also placed the stock on a watch list for faulty internal management and fined the firm 91.2 million yen for betraying investors’ trust.
The Nikkei rose 1.2 percent to 18,182.88 in midmorning trade after falling 1.6 percent on the previous day.
Investors were also looking ahead to the BOJ policy’s meeting, which is widely expected to maintain the current pace of monetary easing, even as poor data challenges its presumption that economic recovery will boost inflation to its 2 percent target next year.
“We don’t think there will be easing, but investors are cautious because it’s Kuroda. He gave the market a big surprise last year when the market was not expecting easing,” said Takuya Takahashi, a strategist at Daiwa Securities, referring to a surprise monetary easing by BOJ Governor Haruhiko Kuroda last October.
Takahashi also said that investors remain cautious ahead of the conclusion of a crucial policy meeting by the U.S. Federal Reserve on Thursday.
Exporters were stronger, with Toyota Motor Corp rising 3.2 percent, Honda Motor Co gaining 2.8 percent and Panasonic Corp rallying 4.8 percent.
The broader Topix added 1.2 percent to 1,479.75 and the JPX-Nikkei Index 400 advanced 1.3 percent to 13,278.05. (Editing by Shri Navaratnam)