* Murata, TDK soar after Apple’s strong earnings
* Honda surges after co raises FY profit outlook
By Ayai Tomisawa
TOKYO, Aug 2 (Reuters) - Japan’s Nikkei share average posted modest gains on Wednesday, supported by strong earnings reports from local companies and by a rally in Apple suppliers after it reported robust profits.
The Nikkei was up 0.4 percent at 20,058.24 points by mid-morning, after rising 0.3 percent on Tuesday.
Apple suppliers soared, with Murata Manufacturing rising 3.2 percent, Taiyo Yuden rising 3.3 percent and TDK Corp gaining 1.9 percent after Apple Inc delivered surprisingly strong third-quarter earnings and signaled that its upcoming 10th-anniversary iPhone lineup is on schedule.
Honda Motor Co soared more than 4 percent after Japan’s No.3 automaker raised its full-year operating profit forecast thanks to solid demand in Asia.
While Japanese stocks have been supported by strong earnings from companies, traders say the Nikkei will continue to hover around the 20,000 mark because investors have been cautious about the risk of a further rise in the yen.
“So far, companies are reporting better-than-expected results, but such positive catalysts are offset by worries about a strong yen,” said Toru Ibayashi, executive director of Wealth Management at UBS Securities in Tokyo.
“When the Nikkei is trading in a narrow range, retail investors are buying when the index is in the lower level in the range. Foreign investors would have chased the market higher if the yen weakens, but that’s not happening right now.”
Although the dollar was 0.1 percent higher at 110.490 yen during Asian trade, it touched a near seven-week low of 109.920 yen overnight.
The dollar has been weighed down by political turmoil gripping Washington and largely uninspiring U.S. economic data, which is adding to uncertainty about the pace of future U.S. Federal Reserve policy tightening.
Bucking the strength, mining stocks underperformed after oil prices fell, with rising U.S. fuel inventories pulling U.S. crude back below $50 per barrel.
Inpex Corp dropped 0.8 percent and Japan petroleum Exploration Co shed 0.5 percent.
The broader Topix advanced 0.2 percent to 1,631.61 and the JPX-Nikkei Index 400 added 0.2 percent to 14,524.34. (Editing by Kim Coghill)