Nikkei steady as market awaits Yellen's speech

* Nikkei flirting with 5th straight days of gains * Power companies underperform on GS rating cuts By Ayai Tomisawa TOKYO, Feb 24 (Reuters) – Japan’s Nikkei share average edged up on Tuesday but investors were cautious ahead of comments from U.S. Federal Reserve Chair Janet Yellen which could give clues on the likely lift-off date for policy tightening.

The Nikkei rose 0.1 percent to 18,482.55 points after dipping into negative territory briefly. If it ends higher, it will have posted five straight days of gains.

Expectations that the Fed will hike interest rates this year amid signals of a strengthening U.S. economy have kept the market sensitive to the prospects of capital outflows from Asia back to the United States.

“The consensus is that the Fed will raise rates some time between June and December, and people are speculating hard,” said Masaru Hamasaki, head of market and investment information department at Amundi Japan.

Yellen testifies before Congress later on Tuesday and there is much uncertainty over whether she will echo the dovish tone of the minutes from the Fed’s last meeting, or reaffirm June as a window for a first rate hike.

Analysts also said that since Japanese stocks have been trading at 15-year highs and there are signs that the market is overbought, Yellen’s speech could trigger profit-taking.

“The market will be watching Yellen’s every word, if she sticks to the word ‘patient’ or ‘considerable time’. If she uses different terms which imply an earlier rate hike, stocks may be sold,” Hamasaki said.

The toraku ratio, or up-down ratio, stood at 138.65. A level above 120 signals an overbought market. The ratio is calculated by dividing the 25-day moving average of stocks on the Tokyo Stock Exchange’s first section that gained by the 25-day average of those that fell.

Exporters were mixed, with Toyota Motor Corp being flat and Nissan Motor Co falling 1.6 percent.

Daiwa House Industry gained 1.1 percent after the Nikkei business daily reported that it will likely post an operating profit of about 200 billion yen for the year ending March 2016, higher than the current year through March.

Underperforming the market were power companies after Goldman Sachs cut their ratings.

Hokuriku Electric Power Co dropped 3.0 percent while Shikoku Electric Power Co

The broader Topix dropped 0.1 percent to 1,500.80, and the JPX-Nikkei Index 400 shed 0.2 percent to 13,612.17.

(Editing by Kim Coghill)

Nikkei Futures

nikkeifutures.org@imediaone.com

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