Nikkei edges up as market awaits news on Japan-U.S. trade talks

* Market optimistic on show of U.S-Japan friendship -
analyst
* Volumes may stay thin due to a holiday in the U.S.

By Ayai Tomisawa
TOKYO, May 27 (Reuters) - Japan's Nikkei edged up on Monday
morning, helped by Wall Street's Friday gains, while the market
awaited the outcome of trade talks between the leaders of Japan
and United States.
The Nikkei share average .N225 added 0.3% to 21,181.80 at
the midday break. Hit by intensifying U.S.-China trade
frictions, the benchmark index has dropped 5% this month.
The market's direction is expected to rely on the outcome of
the trade talks, while volume may stay subdued with fewer
traders in the market as U.S. markets are closed on Monday for a
holiday, analysts said.
On Monday, President Donald Trump and Prime Minister Shinzo
Abe will hold formal talks. A joint news conference will be
held from 0500 GMT.
The two leaders golfed and attend a sumo tournament, putting
on a show of friendship meant to demonstrate the strength of the
U.S.-Japan alliance, but they have policy disagreements over
trade. Trump has threatened to target Japanese automakers with high
tariffs in his effort to cut trade surpluses with other
countries.
"The market seems to stay positive about the trade talks
after seeing headlines suggesting their friendly relationship
over the weekend," said Ryohei Yoshida, a senior technical
analyst at Daiwa Securities.
The market focus is on tariffs on autos, while they are
optimistic about the developments after Trump tweeted about a
progress in the Japan-U.S. talks, Yoshida said.
"Great progress being made in our trade negotiations with
Japan. Agriculture and beef heavily in play," Trump tweeted
after arriving back in Tokyo from the suburban golf course where
the two played.
"Much will wait until after their July elections where I
anticipate big numbers."
Index-heavy names such as Fast Retailing 9983.T and
SoftBank Group Corp 9984.T advanced on Monday, up 1.1% and
1.8%, respectively.
Exporters were in demand. Sony Corp 6758.T rose 0.9%,
Subaru Corp 7270.T gained 1.8% and Hitachi Ltd 6501.T soared
1.7%.
The broader Topix .TOPX added 0.4% at 1,546.90.

(Editing by Richard Borsuk)