(Repeats to fix word in headline, corrects details of Bank of Japan purchases of ETFs in paragraph 11) * Sharp shoots up on news of TV tie-up for China * Boeing suppliers lag * Exporters reclaim some of previous session's losses By Sophie Knight TOKYO, Jan 17 Japan's Nikkei share average rose on Thursday morning after suffering its biggest one-day drop in eight months on Wednesday, but airlines and suppliers to Boeing dropped after its Dreamliner passenger jet was grounded due to safety issues. Struggling TV maker Sharp Corp was also in focus as it shot up 7.3 percent after the Nikkei business daily reported it is in the final stages of talks with Lenovo Group Ltd to tie up its television business in China. Sharp was the most-traded stock on the main board by turnover Suppliers to Boeing Co dropped after the U.S. Federal Aviation Administration said on Wednesday it would temporarily ground the new 787 jet after a second incident involving battery failures led to an emergency landing in Japan. GS Yuasa Corp, which makes the batteries, dropped 5 percent, while other suppliers Mitsubishi Heavy Industries Ltd , Toray Industries Inc, and Osaka Titanium Technologies Co slipped between 0.8 percent and 2.1 percent. The Nikkei gained 0.8 percent to 10,683.61, helped by exporters such as Toyota Motor Corp clawing back a little of the losses they saw on Wednesday, when the benchmark tumbled 2.6 percent on a firmer yen. Toyota rose 1.9 percent while Honda Motor Co Ltd and Mazda Motor Corp gained 3.2 and 2.5 percent, respectively. But defensive sectors such as pharmaceuticals and food companies were also strong, suggesting weaker risk appetite. "The yen has weakened a bit after firming considerably yesterday, which is helping the market," said Hirokazu Fujiki, manager of investment strategy at Okasan Securities. "But as we're in wait-and-see mode for the BOJ, I don't think volume is going to be that impressive today. The trouble is I don't think they will be able to pull any surprises beyond announcing the inflation target everyone already expects." The Bank of Japan, which will hold its monthly policy meeting on Jan. 21-22, has come under pressure from the government to introduce aggressive easing to energise the ailing economy and reach a 2 percent inflation rate. That pressure contributed to a weaker yen, potentially boosting the profits of exporters once repatriated, helping the Nikkei sprint up around 26 percent over the past two months. The BOJ bought 22.7 billion yen ($257 million) worth of exchange-traded funds to prop up the market on Wednesday, a common step when the broader Topix loses more than 1 percent in the morning session. The Topix had dropped 2 percent by the end of the day. By mid-morning on Thursday, the index was up 0.7 percent at 894.48. ($1 = 88.4950 Japanese yen) (Additional reporting by Sophie Knight, Ayai Tomisawa; Editing by Jacqueline Wong)
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