TOKYO: Japanese shares edged up on Tuesday underpinned by Wall Street gains overnight, but caution ahead of US inflation data and some central banks’ policy meetings capped gains.

By 0144 GMT, the Nikkei index was up 0.18% at 32,528.47, after opening 0.50% higher.

The broader Topix edged up 0.11% to 2,363.06. US stocks ended the session higher overnight, with the tech-heavy Nasdaq index leading the US equities rally.

“The Japanese market rose at the open but failed to maintain that momentum. Market players are cautious about the US inflation data, as well as outcome of the FOMC (US Federal Open Market Committee) and Japan’s central bank meeting next week,” said Shigetoshi Kamada, general manager-research, Tachibana Securities.

Investors are awaiting US August inflation data due on Wednesday for clues on the Federal Reserve’s interest rate trajectory.

Back home, the Bank of Japan (BOJ) policymakers are increasingly talking up the need to shift away from the massive monetary stimulus of the past decade.

Tokyo’s Nikkei index falls on higher yen, rising yields

Japan’s 10-year government bond yield rose to 0.720%, hitting a fresh high since January 2014, after BOJ Governor Kazuo Ueda signalled the end of the negative rate policy in an interview with a local newspaper.

Ueda’s comments helped the yen to rise sharply against the dollar on Monday, easing concerns about a possible intervention by the Japanese government to lift the yen, said Kamada. Technology start-up investor SoftBank Group rose 2.44% to give the biggest support to the Nikkei.

Uniqlo brand owner Fast Retailing gained 0.42%. Toyota Motor rose 1.25% to lead the Topix gains, while the transport sector jumped 1%.

The drug sector gained 1.19% to become the top gainer among the Tokyo Stock Exchange’s 33 industry sub-indexes.

Heavy machinery maker IHI tanked 14% to become the worst performer on the Nikkei. Steel makers lost 1.63% and was the worst performer.