* Nikkei cuts two days of losses but gains seen limited
* Stable dlr/yen helps, but Fed Nov meeting awaited-analyst
* Tech firms' earnings begin this week, profit seen patchy
By Aiko Hayashi
TOKYO, Oct 27 (Reuters) - Japan's Nikkei average rose 0.6 percent on Wednesday after two days of losses, helped by short-covering on a halt in the yen's advance against the dollar, with solid earnings reported so far helping boost investor confidence.
But analysts expect gains to be kept in check as the market heads into the peak of the earnings season, with Canon Inc set to open the technology sector's reporting later in the day.
"Short-covering of stocks emerged on stabilising currency moves, which was helped by views that the Federal Reserve's expected easing may not be as big as has been expected due to factors such as solid U.S. earnings," said Fumiyuki Nakanishi, a manager at SMBC Friend Securities.
"Still, the market is unlikely to find a clear direction until the Fed's Nov.2-3 meeting. Dealers are also finding it hard to actively take positions eyeing the month-end, as are institutional investors, because we're in the midst of the earnings season."
The benchmark Nikkei rose 54.94 points to 9,432.32, after having slipped 0.5 percent this week, while the broader Topix added 0.4 percent to 820.89.
Japanese stocks have faced pressure from the yen, which firmed to a fresh 15-year peak of 80.41 against the dollar on Monday, approaching a record high of 79.75 yen. In early Asia trade, the yen changed hands at 81.45 yen.
The Nikkei's support likely stands at last week's intraday lows around 9,310-9,320, with the upper level of its daily Ichimoku cloud near 9,300 also seen as key technical support.
Some technical resistance is seen at the 25-day average, now at 9,490.
Japan's electronics firms are expected to show a patchy recovery for July-September from last year's weak results, but even strong performers will likely leave their full-year forecasts unchanged as concerns mount over the strong yen and disappointing demand for TVs.
Canon, set to report results after the market close, is expected to show a nearly 50 percent jump in operating profit year-on-year to 89.5 billion yen, on healthy camera sales and cost-cutting. For a PREVIEW of electronics firms' earnings see
The stock was down 1.5 percent at 3,650 yen.
But shares of other companies that had upbeat earnings prospects found favour.
Sumitomo Heavy Industries Ltd shot up 5.4 percent to 467 yen after the major shipbuilder more than doubled its half-year net profit estimate thanks to bigger excavator sales and cost-cutting measures.
The company now projects a group net profit of 8 billion yen ($98.26 million) for the six months to Sept. 30 instead of a previously projected profit of 3 billion yen.
Shares of Mitsubishi Corp gained 1.3 percent to 1,998 yen after the Nikkei business daily said the trading firm's net profit likely jumped 89 percent on the year to around 260 billion yen in the April-September first half, thanks to strength in energy and mineral operations.
Exporters rose, with TDK Corp up 1.7 percent at 4,675 yen and Tokyo Electron Ltd rising 1.1 percent to 4,825 yen. Honda Motor Co climbed 1.5 percent to 2,948 yen. (Editing by Michael Watson)