Nikkei dips after three-day rally, Pioneer up

TOKYO, Aug 1 (Reuters) The Nikkei edged down 0.07 percent on Tuesday as investors took profits in Canon Inc and other recent gainers, but losses were capped by buying in Pioneer Corp which posted a surprise quarterly profit.

Investors stopped short of buying aggressively ahead of the the Federal Reserve's policy-setting meeting next week. The Nikkei's three-day rally has also provided a chance to take profits, said analysts.

''We have started to see some foreign investors coming into the Japanese market after earnings ... but unless the U.S. monetary policy is set foreign investors won't be actively buying stocks,'' said Kazuhiro Takahashi, general manager at equity planning and administration department at Daiwa Securities SMBC Co Ltd.

The Nikkei dipped 10.41 points to 15,446.40 as of 0429 GMT. The average has climbed 572 points over the last three sessions partly thanks to strong earnings reports.

The TOPIX index was 0.25 percent lower at 1,568.06.

Major companies to announce earnings later in the day include Astellas Pharma Inc., Tokyo Electric Power Co. Inc. and NTT Data Corp.

Zenshiro Mizuno, senior managing director at Marusan Securities Co. Ltd.'s equity trading division, said the market overall looks well supported despite some uncertainty over U.S. monetary policy and its economy.

''Earnings results from electronics companies are a positive surprise, brightening up sentiment and raising expectations for earnings upgrades going forward,'' he said.

For now though, investors took profits in some of the technology shares.

Canon, the world's largest digital camera maker, fell 1.5 percent to 5,430 yen. The stock had risen 2.2 percent since posting stronger-than-expected quarterly results on Thursday.

Bank shares also rang up losses after posting poor earnings results.

Shares of Mitsubishi UFJ Financial Group Inc., the world's largest bank by assets, dropped 3.1 percent to 1.57 million yen after it said quarterly profit dropped 16 percent from a year earlier due to losses on its bond holdings.

Mizuho Financial Group Inc., Japan's second-largest lender, followed suit, declining 2.1 percent to 943,000 yen.

Shares in Pioneer jumped 7.7 percent to 2,020 yen after booking a surprise quarterly profit thanks to cost cuts, strong sales of plasma TVs and a weaker yen, and lifted its full-year outlook by 50 percent to above market expectations.

Strong earnings also helped Daiichi Sankyo Co. Ltd., which gained 2.5 percent to 3,230 yen. Japan's No.2 drug maker reported a better-than-expected quarterly profit and raised its half- and full-year forecasts.

Mitsui Fudosan Co. Ltd., Japan's biggest real estate company, rose 1.2 percent to 2,465 yen, up for the third session, after solid earnings results.

Some other real estate stocks were also supported by an anticipated recovery in land prices in an annual survey released on Tuesday.

The survey by the National Tax Agency, released after the end of morning trade, showed nationwide land prices on Jan. 1, 2006, were up an average 0.9 percent from a year earlier, rising for the first time in 14 years.

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