Nikkei edges up, but caution prevails ahead of global events

TOKYO: Japan's Nikkei share average hovered in positive terrain on Thursday, with the yen moving away from recent highs and Wall Street edging up, but market participants were on guard ahead of key events.

The Nikkei was up 0.1 percent at 19,993.97 at the end of morning trade.

"We are just moving in a range on either side of 20,000," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management, referring to the milestone broken last week, when Japanese shares climbed to their highest since August 2015.

UK voters head to the polls for a general election, the European Central Bank holds a regular policy meeting and former FBI Director James Comey will testify to the U.S. Senate later on Thursday.

"All of these three events add some macro benchmarks or catalyst potential," said Stefan Worrall, director of Japan equity sales at Credit Suisse.

"People remember the UK referendum last year was something that affected the Friday trading day in Japan. This is not the same scale or likelihood of shock factor, but the results are unclear," he said.

Comey accused U.S. President Donald Trump on Wednesday of asking him to drop an investigation of former national security adviser Michael Flynn as part of a probe into Russia's alleged meddling in the 2016 presidential election.

The ECB is widely expected to keep its policy unchanged, but sources told Reuters last week the central bank will acknowledge the improved economic outlook by removing a reference to "downside risks" in its statement.

Meanwhile, a decisive victory for UK Prime Minister Theresa May would ensure a smooth exit from the European Union, though opinion polls have shown May's Conservative party's lead over the opposition Labour party has narrowed.

Shares got a bit of a tailwind from a modestly weaker yen.

But sentiment was curbed by economic data early on Thursday. Japan's economic growth in the January-March period was revised to less than half its original estimated pace because of a downward adjustment in business inventories,  underscoring the fragility of its export-led expansion.

Japanese markets had a muted reaction to North Korea's latest missile tests. The rogue state fired what appeared to be several land-to-ship missiles off its east coast on Thursday, South Korea's military said, ignoring world pressure to curb its weapons development.

Toshiba Corp rose 4.5 percent after sources told Reuters it aims to name a buyer for its semiconductor business next week.

The choice has narrowed to one bid from U.S. chipmaker Broadcom Ltd and U.S. tech fund Silver Lake and another from Toshiba chip partner Western Digital Corp and Japanese government-related investors, sources said.

Dentsu Inc shares dropped 2.8 percent, after the advertising group said on Wednesday its net sales for May fell 6.8 percent from the same month a year ago.

Japan Display was down 3.3 percent, after a source said the company was considering restructuring beyond cutting jobs and consolidating production, as its late entry into OLED technology caused loss of business with Apple Inc.

The broader Topix added 0.1 percent to 1,598.21, while the JPX-Nikkei Index 400 also gained 0.1 percent to 14,238.76.