* Nikkei edges up in thin trade, yen caps gains
* Holding above 25-day moving average at 9,600 seen key
* U.S. economy hopes war with worry after Bernanke comments
* Semiconductor wafer shares up after report of higher prices
By Elaine Lies
TOKYO, July 22 (Reuters) - Japan's Nikkei stock average edged
up 0.2 percent in thin trade on Wednesday as chip-related stocks
such as Shin-Etsu Chemical <4063.T> climbed, but gains were
capped by investors eager to take profits ahead of Japanese
corporate earnings.
Exporters such as Canon Inc <7751.T> were shaky and many lost
ground due to a slightly stronger yen that rose after remarks by
Federal Reserve Chairman Ben Bernanke.
The benchmark Nikkei <> spent much of the morning in
negative territory, but falls were countered by growing optimism
about a recovery in the U.S. economy after a spate of strong
earnings reports.
"At this point I think most people are expecting an economic
recovery, the issue now is just whether they think it will happen
quickly or gradually," said Tomomi Yamashita, a fund manager at
Shinkin Asset Management.
The main U.S. share indexes rose on Tuesday, buoyed by solid
profits at Caterpillar Inc <CAT.N>, but gains were limited by
investor caution after a recent earnings-fuelled rise as well as
a warning by Caterpillar that the current quarter will be tough.
Bernanke said in testimony before a congressional panel that
mounting joblessness, slumping home values and tight credit were
likely to curb consumer spending -- a major driver of U.S.
economic growth. []
Market analysts said there was growing concern that stocks
may be overdue for some selling after five straight days of gains
to Tuesday that saw the Nikkei rise 6.7 percent, and there was a
sense U.S. markets could be overextended as well.
"It wouldn't be at all surprising at this point for U.S.
stocks to dip, and investors are holding back from buying as a
result," said Yutaka Miura, a senior technical analyst at Mizuho
Securities.
S&P 500 futures <SPc1> edged down 0.2 percent.
The benchmark Nikkei <> gained 15.67 points to 9,667.69
after closing at a two-week high on Tuesday. The broader Topix
<> edged up 0.2 percent to 903.59.
Analysts said one key technical level for the Nikkei was
9,600, just under where the 25-day moving average comes in, and
that a break below this could signal a period of downward
adjustment.
The 25-day moving average for the Topix is now just over 900,
with the broader index managing to break above this just before
the close of morning trade.
EDGY EXPORTERS
Shin-Etsu Chemical, a top maker of semiconductor wafers,
climbed 5.1 percent to 4,750 yen, becoming one of the top
contributors to the Nikkei 225, after the Nikkei business daily
said its unit Shin-Etsu Handotai is in talks to raise the price
of 300 mm wafers 30-40 percent. []
Rival Sumco Corp <3436.T>, which the Nikkei said could follow
soon, gained 4.5 percent to 1,577 yen.
Otherwise, gains centred on a range of defensive shares such
as seasoning maker Ajinomoto <2802.T>, which rose 3.7 percent to
823 yen.
Sapporo Holdings <2501.T> rose 3.3 percent to 557 yen after
the Nikkei business daily reported on Wednesday that the brewer
apparently broke even in January-June, beating the company's own
forecast for an operating loss of 2 billion yen ($21.4 million).
The dollar was down 0.1 percent against the Japanese currency
at 93.61 yen <JPY=> but off earlier lows.
Sony Corp <6758.T> lost 0.9 percent to 2,295 yen, Canon fell
1.6 percent to 3,150 yen, and Advantest Corp <6857.T> dropped
1.8 percent to 1,752 yen.
Shippers fell after the Baltic Exchange's main sea freight
index <.BADI>, which tracks rates to ship dry commodities, fell
1.6 percent on Tuesday as more vessel availability weighed on
recent gains.
Mitsui O.S.K. Lines <9104.T> lost 1.3 percent to 598 yen.
Trade slowed on the Tokyo exchange's first section, with 959
million shares changing hands, compared with last week's morning
average of 1 billion.
Advancing shares outpaced declining ones by 996 to 555.
(Reporting by Elaine Lies; Editing by Edwina Gibbs)
