Nikkei gains as techs rally, investors unfazed by weak earnings

* Investors look for companies with early signs of bottoming
out
* More earnings coming up: Sony, Nintendo due after market
close
* BOJ stands pat, market shows limited reaction

By Hideyuki Sano and Tomo Uetake
TOKYO, July 30 (Reuters) - Japanese shares advanced on
Tuesday, led by technology firms, as investors looked beyond
sluggish earnings in the previous quarter and bet on a potential
recovery over the coming seasons.
The Nikkei share average .N225 rose 0.43% to 21,709.31,
edging near its 2-1/2-month high of 21,823 touched last week.
"I think we are at the final phase of pricing in
deteriorating earnings. Investors are starting to see recovery
in 2020," said Masayuki Kubota, chief strategist at Rakuten
Securities.
"The semi-conductor sector is the easiest example. The
inventory adjustment in DRAM and flash memories is coming to an
end and we are increasingly starting to see 5G-related demand,"
he said.
A case in point was chip-making machine manufacturer Screen
Holdings 7735.T , which jumped 3.5% even though the company cut
its annual net profit estimate by 5.6%, citing weaker sales in
its printing-related businesses and rising costs. Investors were also buying up other tech shares that had
been hit by concerns over intensifying frictions between the
United States and China over trade and technological issues.
Fanuc Corp 6954.T climbed 3.1% as its quarterly results
beat analyst expectations even though the robot maker cut its
annual profit estimates on uncertainties from trade frictions.
Hitachi 6501.T was another counterintuitive mover, as the
shares of the manufacturing conglomerate rose 3.0% despite
reporting a 16.0% fall in quarterly operating profit, due to
worsening market for smart phone and car related materials.
Kawasaki Heavy Industries 7012.T followed the normal
script of getting ditched on weak earnings, diving 5.7% after
the transportation and heavy equipment maker reported the first
quarterly net loss in 10 years for the April-June period.
Japan's industrial output also fell a bigger-than-expected
3.6% to 1-1/2-year lows in June but that did not shake
investors' confidence either. More companies including Sony 6758.T , Nintendo 7974.T
and Sumitomo Mitsui Financial Group 8316.T , are due to
announce earnings after market close on Tuesday.
Earlier in the day, the Bank of Japan held off on expanding
stimulus but signalled its readiness to do so "without
hesitation," if a global slowdown jeopardizes the country's
economic recovery. Growing fallout from the U.S.-China trade war has prompted
major central banks to signal more easing and put pressure on
the BOJ, which has far less policy ammunition left to deal with
a significant downturn. The Federal Reserve is widely expected to cut its interest
rates on Wednesday for the first time since the financial crisis
more than a decade ago.
The broader Topix .TOPX gained 0.45% to 1,575.58. Turnover
on the Tokyo Stock Exchange's main board rose to 2.09 trillion
yen ($19.2 billion) versus the previous day's 1.74 trillion yen,
due in part to rebalancing for regular changes in the Topix
weightings

($1 = 108.6000 yen)