* Property leads gains on Nomura Securities target share hike
* Wall St reaction to Jobs' medical leave, Apple results eyed
* Smartphone, touch panel-related firms down on Jobs news
* Steelmakers lower on report to undershoot profit f'casts
By Antoni Slodkowski
TOKYO, Jan 18 (Reuters) - Japan's Nikkei average got a boost from property and banking shares to edge higher on Tuesday, while investors cautiously waited to see Wall Street's reaction to news that Apple Inc CEO Steve Jobs was again taking medical leave.
Brokers said a smaller drop in Shanghai shares after Monday's fall on China's latest move to fight inflation was also lifting investors' confidence.
But the Nikkei's gains were limited as a strong advance in real estate shares was offset by declines in steelmakers after a report by the Nikkei business daily that Nippon Steel Corp would likely fall short of its pretax profit forecast.
"Banks and property shares have gained as foreign investors have piled in, then we saw some profit-taking and now they're off again, boosted by domestic retail investors," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
"Individual investors, who now account for about 30 percent of the market -- a very high percentage -- are pushing those stocks higher, showing that sentiment in the market is very strong."
The benchmark Nikkei ended the day up 0.2 percent or 16.12 points at 10,518.98.
The broader Topix index rose 0.3 percent to 931.58.
The property sector was among the top gainers, adding 1.7 percent, after Nomura Securities hiked its target prices for eight property firms on a pickup in the real estate market.
Mitsui Fudosan Co rose 1.5 percent to 1,754 yen and Mitsubishi Estate Co Ltd jumped 3.4 percent to 1,627 yen.
The real estate sector has gained around 20 percent since the Bank of Japan's asset buying scheme was launched in October, outperforming the Nikkei's 13 percent rise over the same period.
JOBS NEWS WEIGHS
"The 'Jobs shock' can move not only individual shares or sectors but whole indexes, so obviously investors will look closely at how the U.S. market reacts to both earnings and the news about Jobs," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Apple's announcement that Jobs would take medical leave for the third time since 2004 sent Apple's German shares 6.2 percent lower in Frankfurt. It came when U.S. markets were closed for the Martin Luther King holiday and ahead of the firm's closely watched earnings report due on Tuesday.
The news prompted investors to lock in profits on tablet and smartphone parts makers that have been outperforming the broader market recently.
Foster Electric, which makes headphones for smartphones, lost 1.4 percent to 2,549 yen after having surged some 40 percent since the start of November, outperforming the Nikkei's 15 percent rise over the same period.
Kimoto Co Ltd, a maker of top-class hard coat films for touchpanels, fell 2.1 percent to 841 yen. Murata Manufacturing, the world's biggest producer of ceramic capacitors, which are tiny devices used in smartphones, shed 0.2 percent to 6,020 yen.
Analysts said the news could have a major impact on share moves because Apple, with its market capitalisation roughly 10 times that of Sony Corp, accounts for some 7 percent of the Nasdaq Composite's market cap.
Apart from the iPad maker, investors will look for clues that the U.S. economy is on a sustainable recovery path in results to be announced later in the week by economic bellwether General Electric and tech names such as Google and eBay.
Steelmakers were among the biggest decliners after a report by the Nikkei business daily that Nippon Steel will likely post a pretax profit of about 220 billion yen ($2.7 billion) for the year ending in March, about 30 billion yen below its forecast.
"This fall reflects higher commodities prices that have been benefiting trading houses such as Mitsubishi Corp," said Mitsubishi UFJ Morgan Stanley's Fujito.
Nippon Steel fell 1.4 percent to 293 yen and JFE Holdings Inc lost 1.4 percent to 2,787 yen, while Mitsubishi Corp added 1.1 percent to 2,392 yen.
Trading volume picked up with around 2 billion shares changing hands on the Tokyo Stock Exchange's first section, from 1.9 billion on Monday, but still below last week's daily average of 2.3 billion.
Advancing shares outpaced declining ones by 943 to 547. (Reporting by Antoni Slodkowski; Editing by Chris Gallagher)