*Nikkei edges up on short-covering but lacks direction
*Mazda falls on news Ford to sell most of its Mazda shares
TOKYO, Oct 18 (Reuters) - Japan's Nikkei average edged up on Monday on short-covering after losing nearly 1 percent the previous session, with strength on the Nasdaq helping to support Japanese shares.
The market struggled to find clear direction due to a dearth of market-moving incentives, however, while short-term players took their cues from movements in the yen.
Shares of Mazda Motor Corp fell 2.8 percent after a source with knowledge of the matter said Ford Motor Co was planning to sell almost all of its remaining stake in the Japanese auto company.
"The Nikkei rebounded on short-covering after last week's loss but the market is having difficulty finding a clear direction without any new incentives," said Nagayuki Yamagishi, strategist at Mitsubishi UFJ Morgan Stanley Securities.
By mid-morning, the benchmark Nikkei had edged up 0.5 percent, or 51.53 points, to 9,551.78.
The broader Topix gained 0.7 percent at 832.40.
The Nikkei drew support from the Nasdaq, which rose more than 1 percent as Google surged after blowout third quarter results on Friday, but traders were expected to be careful about chasing Japanese shares on rallies as the yen remained strong.
The yen inched up to 81.35 against the dollar, holding near a 15-year high of 80.88 reached on the EBS platform last week.
Traders were reluctant to take large fresh positions due to a lack of trading factors.
"The Nikkei is likely to be trade in a narrow band around 9,500. The focus is on the yen but the forex market is expected to be nervous ahead of the G20 meeting this weekend," said Masayoshi Yano, a senior market analyst at Meiwa Securities.
Mazda's fall was seen having only a limited effect on the broader share market.
"The Mazda news is not having an impact on prices overall as it was not a big surprise to the market," Yamagishi said. (Reporting by Chikafumi Hodo; Editing by Edmund Klamann)