Nikkei touches 10-month high, earnings give boost

                                
 * Nikkei rises as far as 10,313.29, a 10-month high
                                
 * Technical picture brightens, next target at 10,800
                                
 * Sony, Fujitsu gain after earnings but Nintendo falls
                                
 * Property shares strong
                                
 By Elaine Lies
                                
 TOKYO, July 31 (Reuters) - Japan's Nikkei average rose 1.4
percent and hit a 10-month high on Friday, with sentiment
increasingly positive after a slew of solid earnings that saw
Sony Corp <6758.T> post a smaller than expected loss.
Property shares climbed after Mitsui Fudosan Co <8801.T>
reported a 32 percent rise in quarterly profit, with fellow
developer Mitsubishi Estate <8802.T> surging 5 percent ahead of
its earnings announcement later on Friday.
                                
 By contrast, Nintendo Co <7974.OS> sank 5.6 percent after it
reported a 66 percent fall in quarterly operating profit on
slowing demand for its Wii videogame console and a stronger yen,
though it stuck to its full-year forecast for a decline of 12
percent. [ID:nT269596]
                                
 "Earnings for the April-June quarter have been stronger than
expected and there has been a fair number of upward forecast
revisions, all of which is improving sentiment and keeping the
market supported," said Yumi Nishimura, deputy general manager in
the investment advisory section of Daiwa Securities SMBC.
                                
 "But given that key U.S. indicators such as employment data
are due out next week, rises will not be unchecked. Expect some
profit-taking at the highs."
                                
 The benchmark Nikkei <.N225> gained 139.69 points to
10,304.90 after earlier rising as far as 10,313.29, its highest
since early October. The broader Topix <.TOPX> rose 1.1 percent
to 947.20.
                                
 The run of largely good results and some positive surprises,
such as Honda Motor Co <7267.T> beating expectations for a loss,
are likely to help buoy the Nikkei well into next week, said
Noritsugu Hirakawa, a strategist at Okasan Securities.
                                
 "There isn't a sense of overheating yet, we aren't likely to
see caution about that until perhaps around 10,500," he said.
                                
  Tokyo Electron <8035.T> and pharmaceutical firm Takeda
Pharmaceutical Co <4502.T> are among firms due to announce
earnings later on Friday.
                                
 The technical picture is brightening as well, analysts said.
The Nikkei's 25-day moving average appears set to cross above
its 50-day moving average, a move called the "Golden Cross" that
often precedes gains.
                                
 Nagayuki Yamagishi, a strategist at Mitsubishi UFJ
Securities, said now that the Nikkei has broken above resistance
at 10,200 its next target may well be 10,800 -- around the 50
percent Fibonacci retracement of its fall from a June 2008 high
near 14,500 to a 26-year-low just under 7,000 last October.
                                
 EARNINGS JOY
                                
 In a sign of the growing positive mood, Toyota Motor Corp's
<7203.T> loss for this business year will likely be several tens
of billions of yen less than originally forecast by the automaker
thanks to strong sales of hybrid cars, public broadcaster NHK
reported. Toyota gained 1 percent to 3,970 yen.
                                
 Sony rose 4.4 percent to 2,615 yen after the consumer
electronics maker posted a smaller-than-expected quarterly loss,
helped by an improvement in its struggling flat TV business, and
said it was aiming to beat its official forecast and at least
break even for the full year. [ID:nT140138]
                                
 Fujitsu Ltd <6702.T>, Japan's biggest IT services company,
gained 4.6 percent to 621 yen after it nudged up its annual
outlook for a bigger profit. It also posted a smaller quarterly
loss than expected thanks to cost cuts and better microchip
sales. [ID:nT326629]
                                
 Solid earnings extended across sectors.
                                
 Medical equipment maker Terumo Corp <4543.T> jumped 4.9
percent to 4,740 yen after it raised its first-half profit
forecast following better first-quarter results than it had
expected thanks to a softer yen than it forecast and solid sales
of catheter medical tubes.
                                
 Mitsui Fudosan Co <8801.T>, Japan's largest property
developer, climbed 5.4 percent to 1,746 yen after reporting a 32
percent rise in quarterly profit helped by a solid performance in
apartment sales and by its lease business. [ID:nT3219]
                                
 The property subindex <.IRLTY.T> rose 5.1 percent, becoming
the biggest gainer among the subindexes.
Trade picked up on the Tokyo exchange's first section, with
1.1 billion shares changing hands, compared with last week's
morning average of 1 billion.
                                
 Advancing stocks outnumbered declining ones 985 to 529.
 (Editing by Michael Watson)