Japanese stocks edge higher ahead of BOJ policy meeting

TOKYO, July 19 (Reuters) – Japanese stocks posted modest gains on Tuesday after a three-day weekend, with investors reluctant to make major bets ahead of a policy meeting by the Bank of Japan, despite lowered estimates for aggressive monetary tightening by the U.S. Federal Reserve.

The Nikkei share average .N225 opened 0.8% higher to break through the psychological barrier of 27,000, briefly retreating before making another push to finish at 26,977.37 at the end of the morning session, up 0.71% for the day.

The broader Topix .TOPX gained 0.49%.

“It’s tough to continue buying ahead of the Bank of Japan’s monetary policy meeting this week and earnings season getting underway,” said a market participant at a domestic securities firm.

Of Nikkei’s 225 components, 164 made gains, 58 made losses, and three traded flat.

Shares of heavy industries were some of the strong performers, buoyed by a report over the weekend that Prime Minister Fumio Kishida’s government won’t set a ceiling on defense spending in the next annual budget.

Kawasaki Heavy Industries Ltd 7012.T rose 4.28%, and Mutsubishi Heavy Industries Ltd 7011.T was up 3.07%.

Even as shares of Apple Inc AAPL.O made losses overnight following a Bloomberg report that the company planned to slow hiring over the next year, Japanese suppliers didn’t appear to be broadly affected.

Sony Group Corp 6758.T, Apple’s primary image sensor supplier, gained 2.72%. Components makers Murata Manufacturing Co Ltd 6981.T and Taiyo Yuden Co Ltd 6976.T were down 0.05% and up 0.99%, respectively.

Utilities companies weighed in the Nikkei, with the sector down 1.41% overall.

Kansai Electric Power Co Inc 9503.T lost 2.35%, and Tokyo Electric Power Co Holdings Inc 9501.T was down 1.87%.

(Reporting by Sam Byford and Tokyo markets team; Editing by Sherry Jacob-Phillips)

((Sam.Byford@thomsonreuters.com;))