By Antoni Slodkowski
TOKYO, April 14 (Reuters) - Japan's Nikkei average erased some of the previous day's gains on Thursday in light volume as investors awaited earnings, while Isuzu Motors jumped on a report Volkswagen was mulling buying all or part of the Japanese truckmaker.
Isuzu gained 6.5 percent to 310 yen and was the third-most actively traded share on the Tokyo Stock Exchange's main board. After less than an hour it was already trading at 1.5 times its daily average volume for the last 30 days. [ID:nLDE73C1GJ]
The mood in Tokyo soured after an unenthusiastic response on Wall Street to banking heavyweight JPMorgan Chase's earnings beating expectations, suggesting strong earnings have already been priced into the market's recent rally and giving little incentive to aggressively chase the Nikkei higher, players said.
Tokyo stocks have regained around two-thirds of the losses suffered after the March 11 earthquake, but trade has become more volatile and thinned out ahead of earnings reports that may pose more questions than give answers as many firms are poised not to give forecasts for the business year.
"I look at the Nikkei level now and I'm not sure if it's low or high," said Yuuki Sakurai, CEO of Fukoku Capital Management, citing such reasons as the unclear situation at the quake-stricken nuclear plant, the difficulty of assessing damage to supply chains and the unpredictable impact of power cuts on Japan Inc.
"I talked to some investors from Singapore yesterday, and I see a lot of uncertainty among foreigners as the impact of all this on the Japanese economy is very difficult to gauge," Sakurai added.
By midmorning the Nikkei benchmark was down 0.4 percent at 9,608.80, while the broader Topix inched down 0.3 percent to 842.46.
Volkswagen said a decision on taking a stake in Isuzu was currently not on the agenda after Manager Magazin said it was discussing the investment in Isuzu, which has a market value of about $6 billion.
The most actively traded share since the quake, Tokyo Electric (Tepco) , added 1 percent to 506 yen after soaring on Wednesday on a report that its liabilities stemming from the nuclear crisis may be capped.
The operator of Japan's crippled nuclear plant said on Wednesday it was still working on a detailed plan to end the country's nuclear crisis a month after it began, as tests showed radiation levels in the sea near the complex had spiked.[ID:nL3E7FD0XJ]
Construction engineering company Modec rose 3.5 percent to 1,507 yen after saying on Wednesday that Woodside Petroleum has named it as one of two companies to conduct front-end engineering design (FEED) for two dry tree units for the Browse liquefied natural gas project in Western Australia. [ID:nL3E7FD12P]
Foreigners bought a hefty 390 billion yen of Japanese shares last week, the third biggest weekly purchase in about a year, government data showed. (Additional reporting by Ayai Tomisawa; Editing by Joseph Radford)