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Japan stocks edge up, weaker yen offsets Fed disappointment

Shinichi Saoshiro

* Nikkei rises 0.09%, Topix adds 0.14%

* Stocks recoup earlier losses as yen weakens to 2-mth low

TOKYO, Aug 1 (Reuters) - Japan's Nikkei share average recouped early losses and ended marginally higher on Thursday, supported by a weaker yen which helped offset disappointment that the U.S. Federal Reserve is not embarking on a lengthy easing cycle.

The Fed on Wednesday lowered rates for the first time since 2008, as widely expected, but Chairman Jerome Powell said the move was not the start of a long series of rate cuts, sending U.S. share markets lower.

The Nikkei ended the day up 0.09% at 21,540.99 points.

The index initially fell as much as 1% but clawed back ground as the yen slid to a two-month low against the dollar after the Fed proved less dovish than anticipated.

"Prior to the FOMC (Federal Open Market Committee) meeting, the chief concern was that while a rate cut was expected to be good for equities, it could also end up strengthening the yen by weakening the dollar," said Takashi Hiroki, chief strategist at Monex Securities.

"But Powell's views doused strong yen concerns, and that has been supportive for Japanese stocks."

Shares of exporters, which benefit from a weaker yen, advanced. Toyota Motor Corp rose 1%, Honda Motor Co edged up 0.4%, Canon Inc added 0.9% and Nintendo advanced 3.3%.

Nomura Holdings rallied 9% as the investment bank said its first-quarter profit soared more than ten-fold after restructuring its portfolio.

Other financial shares also rose with Daiwa Securities Group climbing 2.5% and Shinsei Bank advancing 3.8%.

Takeda Pharmaceutical gained 7.4% after its sales in the April-June quarter increased 88.8%.

Kao Corporation, on the other hand, fell 3.4% after the cosmetic product maker saw its January-June net profit decline 8.8%.

The broader Topix rose 0.14% to 1,567.35.

Of Tokyo's 33 subindexes, 13 were in positive territory, led by securities. (Editing by Kim Coghill)