* Nikkei has added 0.6 pct for the week so far
* Stocks with strong earnings prospects bought - analyst
* Morinaga Milk and Morinaga & Co jump on merger report
By Ayai Tomisawa
TOKYO, Feb 24 Japanese stocks managed to steady
from early falls on Friday as the yen weakened slightly during
Asian trade, but political uncertainty abroad and U.S. tax
policy kept most investors on the sidelines.
The Nikkei edged down 0.1 percent to 19,347.97 in midmorning
trade, crawling back from an intraday low of 19,219.58 hit at
the open. For the week, the benchmark index has so far gained
The broader Topix, meanwhile, was flat at 1,555.64.
Traders said that investors were selective on a day of few
"Investors are cherry-picking stocks of companies which will
likely outperform in the next fiscal year," said Norihiro
Fujito, a senior investment strategist at Mitsubshi UFJ Morgan
"It's not like they are tilted towards defensive stocks or
cyclical stocks... Even in cyclical stocks there are divided
views and investors are cautious against increasing exposure to
the auto sector now."
Electronic components makers and industrial equipment makers
with strong earnings prospects outperformed, with Alps Electric
up 0.6 percent, Keyence Corp rising 1.1
percent and Advantest Corp adding 0.8 percent.
Auto shares underperformed as investors fret over U.S.
President Donald Trump's protectionist stance. Toyota Motor Corp
fell 0.6 percent and Mazda Motor Corp shed 0.3
The transport equipment sector has fallen 2.7
percent so far this year, while the Nikkei has gained 1.3
On Friday, the dollar rose 0.3 percent to 112.89 yen,
compared to a two-week low of 112.55 plumbed overnight.
Concerns over politics on both sides of the Atlantic helped
the safe-haven yen overnight, with anti-EU French presidential
candidate Marine Le Pen's campaign and Trump's timeline on
various policies stoking demand for the yen.
Also hurting the dollar was U.S. Treasury Secretary Steven
Mnuchin's comments to Fox Business Network that any policy steps
the Trump administration takes would likely have a limited
impact this year. He also told CNBC that he wanted to see tax
reform passed before Congress' August recess.
Meanwhile, Morinaga & Co surged 6 percent and
Morinaga Milk jumped 15 percent after the Nikkei
reported that the two companies will integrate their businesses
around April 2018.
The JPX-Nikkei Index 400 was flat at 13,948.33.
(Editing by Shri Navaratnam)