* Nikkei off high on profit-taking as Asian shares fall
* Stable dlr/yen helps, Fed Nov meeting awaited -analyst
* MUFG at lowest close since 2003 on weak trend
* Bullish earnings help confidence; Kao, Fuji Heavy up
By Aiko Hayashi and Chikafumi Hodo
TOKYO, Oct 27 (Reuters) - Japan's Nikkei average ended slightly higher on Wednesday but off its morning highs as falls in Hong Kong and Shanghai shares and weakness in Japanese banking stocks prompted profit-taking.
The Nikkei ran out of steam in the afternoon as banking shares lost ground, with Mitsubishi UFJ Financial Group at its lowest close level since April 2003 amid uncertainty over new global capital regulations, traders said.
Still, the Nikkei managed to find support as investors refrained from selling actively in the midst of the earnings reporting season and the yen drifted down against the dollar from a 15-year high marked this week, traders said.
"The Nikkei struggled to extend gains in the afternoon as Hang Seng shares and other Asian shares dropped. Falls in bank shares depressed the overall tone," said Hideyuki Ishiguro, a strategist at Okasan Securities.
The benchmark Nikkei closed up 0.1 percent or 9.65 points at 9,387.03 after climbing around 0.8 percent at one point in the morning to a session high of 9,453.79.
Meanwhile, the broader Topix inched down 0.02 percent to 817.76.
Hong Kong's benchmark Hang Seng was down 1.65 percent and China's key Shanghai Composite Index fell 1.46 percent, weighed down by falls in commodity prices.
But the Nikkei gained support as the yen was held down near 82 yen to the dollar by late Asian trading. 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.
The dollar rose on Wednesday after the Wall Street Journal said the Federal Reserve was likely to unveil plans for gradual Treasury purchases at its policy meeting next week.
The newspaper said the Fed is likely to reveal a programme of U.S. Treasury bond purchases worth several hundred billion dollars over several months.
"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."
Japan's electronics firms showed a patchy recovery from last year's weak results.
After the market close, Canon Inc reported a 74 percent jump in quarterly profit, above expectations, on strong sales of office equipment and digital cameras, prompting the company to raise its full-year outlook.
Fujitsu Ltd, Japan's largest IT services vendor, recorded a doubling of operating profit in the latest quarter but cut its annual sales outlook as customers rein in IT spending and it copes with a firmer yen.
It left its operating profit forecast unchanged.
EARNINGS BOOST
Share prices of three Japanese banking heavyweights fell as investors continued to unwind positions in the sector reflecting weak technical trends and uncertainty over new global capital regulations, traders said.
Shares of Mitsubishi UFJ Financial Group closed down 1.8 percent at 373, its lowest close since April 2003.
Shares of Mizuho Financial Group dropped 0.8 percent to 118 yen. Japanese banks will report earnings next month.
In contrast, shares of companies that have already reported bullish earnings prospects found favour.
Kao Corp jumped 3.5 percent to 2,075 yen after the household goods maker raised its operating profit forecast to 105 billion yen from 97 billion yen for the year to March. Kao posted a 27 percent rise in April-September operating profit to 57.87 billion yen.
Fuji Heavy Industries Ltd rose 5.3 percent to 555 yen after it lifted its operating profit estimate for the six months ended on Sept. 30 by 63 percent after the market closed on Tuesday.
Toyota Motor Corp gained 1.5 percent to 2,910 yen and Honda Motor Co climbed 1.9 percent, to 2,960 yen.
Analysts have said Japanese carmakers are hurting from a stronger yen but will likely manage big cost reductions and have enough of a profit cushion from the first half to warrant an upward revision to their conservative annual guidance. (Editing by Michael Watson)