April 25, 2019 / 3:07 AM / a month ago

Nikkei edges higher; corporate earnings and BOJ in focus

* Fanuc losses trimmed

* Hitachi Construction jumps on hopes of strong mining business

By Ayai Tomisawa

TOKYO, April 25 (Reuters) - Japan’s Nikkei edged higher on Thursday morning in choppy trade as investors looked to profit guidance from corporate earnings and awaited a Bank of Japan policy decision.

The market is focused on the Bank of Japan’s policy meeting later, which is expected to keep monetary policy steady.

The Nikkei share average rose 0.4 percent to 22,280.99 in midmorning trade, after opening a tad lower.

Eyes were on individual company earnings, which included those relying on Chinese demand such as factory automation machinery makers.

Fanuc Corp dropped as much as 3.1 percent after it expected its net profit to fall by 60 percent for the year ending March 2020. But it later recovered and was down 0.5 percent after the market reassessed its earnings forecast.

“Companies are announcing overly conservative earnings forecasts based on their modest dollar-yen assumptions, but since the pair trades around 112 yen now, investors would downplay it later even if they sold earlier,” said Kazuhiro Takahashi, an equity strategist at Daiwa Securities.

Another factory automation equipment maker Keyence Corp , whose operating profit for the year through March fell short of market expectations, dropped 3.8 percent.

Hitachi Construction Machinery jumped 6 percent after the construction equipment maker forecast an operating profit of 82 billion yen, down 26.4 percent on the year. But the company’s foreign exchange assumption is modest, forecasting the dollar at 100 yen. The dollar traded at 112.1 yen on Thursday.

SMBC Nikko Securities said that while the market expects the mining business to peak, Hitachi’s mining business is expected to rise 27 percent to 184.7 billion yen for the current year.

Canon dropped 2 percent after it cut its operating profit forecast to 274.0 billion yen from 325.0 billion yen for the year ending December, hit by weak camera demand as more people take photos on their smartphones.

The mining sector was the worst sectoral performer after oil prices fell on Thursday as record U.S. output and rising crude stockpiles dampened the impact on markets of tighter U.S. sanctions on Iran. Inpex Corp declined 1.7 percent.

The broader Topix rose 0.3 percent. (Editing by Jacqueline Wong)

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