Japan's Nikkei average inched up 0.23 percent on Thursday as earnings hopes lifted Chugai Pharmaceutical Co. Ltd. and shipping firms such as Kawasaki Kisen Kaisha Ltd.

But Tokyo Electric Power Co. Inc. fell nearly 6 percent on a newspaper report that its earthquake-hit nuclear plant could be closed for more than a year, helping keep overall gains limited.

Buying centered on a limited number of issues with strong profit prospects, and investors also held back ahead of the July 29 upper house elections and quarterly corporate earnings reports, said Zenshiro Mizuno, senior managing director at Marusan Securities Co. Ltd.

We have upper house elections and there's uncertainty about New York stocks, and hence attention is focused on only certain stocks, he said.

The benchmark Nikkei rose 42.17 points to 18,057.75 by 0441 GMT. The broader TOPIX index gained 0.11 percent to 1,760.50.

Takahiko Murai, general manager of equities at Nozomi Securities, said upward revisions of corporate earnings forecasts are essential for the market to advance further.

The Nikkei is trading at a PE of about 20 and this seems to be the level everyone feels comfortable at. For the benchmark to go up, either interest rates have to come down, which is unlikely, or earnings per share have to go up, he said.

In the drug sector, Chugai Pharmaceutical jumped 4.2 percent to 2,110 yen on robust preliminary first-half earnings.

Kawasaki Kisen Kaisha climbed 2.7 percent to 1,702 yen after the Nikkei business daily reported the shipper will likely book 28 billion yen ($230 million) in recurring profit for the April-June quarter, due to robust shipping demand from China and other countries.

Likewise, expectations for strong earnings helped JFE Holdings Inc. add 3.4 percent to 8,190 yen, after earlier hitting lifetime high. The company will unveil first-quarter earnings on July 30.

Japan Nikkei 225