Japan's Nikkei sees slim gains after fall; Sharp jumps
* Sharp shoots up on news of TV tie-up talks in China
* Sony gains 5 percent on Goldman Sachs upgrade
* Exporters reclaim some of previous session's losses
* Boeing suppliers lag
TOKYO, Jan 17 (Reuters) - The Nikkei share average edged up on Thursday, regaining some of the ground lost in its biggest one-day drop in eight months the previous day, with Sharp Corp in the spotlight after news it was in tie-up talks for its TV business in China. A slightly softer yen helped exporters bounce back, with Honda Motor Co Ltd gaining 2.3 percent and Toyota Motor Corp recovering 1.1 percent from its fall in the prior session, when the Nikkei dropped 2.6 percent on a firmer Japanese currency. Sharp climbed 10.2 percent after the Nikkei newspaper reported that the struggling company was in the final stages of talks with Lenovo on a tie-up in television operations in China. Sources later confirmed the report to Reuters. Sharp was the most-traded stock on the main board by turnover. Sony Corp was not far behind, jumping 5 percent after Goldman Sachs upgraded its rating to "neutral" from "sell", saying the stock no longer looked expensive as its competitors have gained on a weaker yen. The Nikkei was up 0.2 percent at 10,619.74 by the midday break on Thursday, after a brief foray into negative territory. That, and strong gains for defensives such as pharmaceuticals and food companies, suggested tempered risk appetite after the benchmark hit a 32-month high on Tuesday. "I think we're seeing a short term correction ... there are expectations of improved earnings due to the weaker yen, but not for the last quarter. The recent rally may have been too sharp," said Shigeo Mito, manager of equity investment at Sumitomo Mitsui Trust Group. The Nikkei has rallied about 26 percent over the past two months, driven by a softening in the yen after Prime Minister Shinzo Abe pressured the Bank of Japan to introduce aggressive policy easing to kickstart the economy and set an annual inflation target of 2 percent.
'WAIT-AND-SEE MODE' Ahead of its next policy meeting on Jan. 21-22, the central bank bought 22.7 billion yen ($256.5 million) worth of exchange-traded funds to prop up the market on Wednesday. It was the first time the bank has done so in almost three months. "We're in wait-and-see mode for the BOJ, I don't think volume is going to be that impressive today. The trouble is I don't think they will be able to pull any surprises beyond announcing the inflation target everyone already expects," said Hirokazu Fujiki, manager of investment strategy at Okasan Securities. Fujiki said some investors were also focusing on China-related stocks ahead of the Chinese GDP data for the last quarter of 2012 due on Friday, which is expected to come in at 7.8 percent growth, beating the previous quarter's 7.4 percent and snapping seven straight quarters of weaker expansion. Komatsu Ltd rose 1.9 percent while the Nikkei China 50, an index of 50 Japanese companies with high exposure to the country, outperformed with a gain of 0.8 percent. The broader Topix inched up 0.3 percent to 890.65. Suppliers to Boeing Co dropped after the U.S. Federal Aviation Administration said on Wednesday it would temporarily ground the new 787 jet after a second incident involving battery failures forced one Dreamliner to make an emergency landing in Japan. GS Yuasa Corp, which makes the batteries, dropped 5 percent. Among other suppliers, Toray Industries Inc slipped 2.2 percent and Osaka Titanium Technologies Co fell 3.2 percent. All Nippon Airways Co Ltd slipped 0.6 percent and Japan Airlines Co Ltd lost 0.3 percent after both grounded their Dreamliner fleets for checks following the incident.