* Steelmakers gain after upbeat earnings
* Fanuc drops after earnings fall short of expectations
* Nikkei on course to end July in narrowest range in 3 decades
* NT ratio at near 16-month low as small caps outperform
By Hideyuki Sano
TOKYO, July 31 (Reuters) - Japan’s Nikkei share average was little changed on Monday, as gains in steelmakers and other companies with upbeat earnings were offset by wariness about the yen’s creeping rise to a 1-1/2-month high against the dollar.
The Nikkei stood at 19,946.32, down 0.1 percent. On the month it was down 0.4 percent, after having moved in a range of 344.23 points - its narrowest monthly trading range in 31 years.
“In general, earnings so far have been pretty good, with even some conservative firms raising their annual estimates,” said Tetsuro Ii, the president of Commons Asset Management.
“But there aren’t many people who say they want to buy now,” he added, noting that investors are wary of unwinding of stimulus by global central banks and relatively high valuations, particularly on Wall Street.
The broader Topix was at 1,620.73, almost flat on the day and keeping slim monthly gains of 0.6 percent after it outperformed the Nikkei this month, thanks to firmness in small cap shares.
The Nikkei’s underperformance led the ratio of Nikkei versus Topix, the so-called NT ratio, to its lowest since April 2016.
On Monday the Nikkei was dragged down by 3.0 percent fall in Fanuc, a Nikkei heavyweight.
The robot manufacturer’s upward revision in earnings fell short of analysts forecasts, though its conservative assumption on the yen’s exchange rates limited losses.
On the other hand, steelmakers gained sharply following their positive earnings.
Kobe Steel rose 6.8 percent and Nippon Steel & Sumitomo Metal gained 2.2 percent.
That helped to make the Tokyo Stock Exchange’s iron and steel subindex the best performer among the TSE’s 33 industry subindexes.
Hitachi rose 4.0 percent to 1-1/2-year highs after the company posted solid earnings for April-June. Takeda Pharmaceutical gained 2.9 percent on its earnings.
But earnings optimism was curtailed as the yen rose to its firmest levels since mid-June on Monday. The Japanese currency stood around 110.42 to the dollar by 0254 GMT.
The yen’s rise came even as data from a U.S. watchdog showed speculators maintained large yen short positions last week, raising worries that their short-covering could lift the yen sharply in the future.
“Judging from past patterns, when speculators have a big short position in the yen, they are likely to have a long position in Japanese shares as well,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Given that foreign investors have sold Japanese shares in August in recent years, the market could face some correction next month,” he added. (Editing by Jacqueline Wong)