Japan's Nikkei average inched down 0.1 percent on Monday, with investors cautious ahead of more corporate earnings reports, but banks rose after Mitsubishi UFJ Financial Group <8306.T> posted its first profit in three quarters.

Companies scheduled to announce results on Monday included Panasonic Corp <6752.T>, Astellas Pharma <4503.T> and Suzuki Motor Corp <7269.T>. Investors also awaited Toyota Motor Corp's <7203.T> earnings report due on Tuesday.

Investors in Japanese stocks can't aggressively buy or sell at this moment as the external environment is holding steady, with U.S. stocks pausing at high levels, said Yutaka Miura, a senior technical analyst at Mizuho Securities.

Optimism about solid corporate earnings was already factored in during the market's recent strong run-up and that alone is no longer strong enough reason to keep pushing up the market.

In choppy trade, the benchmark Nikkei <.N225> slipped 13.98 points to 10,342.85, after rising 1.9 percent on Friday to end at its highest level in 10 months.

The Nikkei's rise on Friday brought its gain for the week to 4.1 percent, while it also booked a 4 percent climb for July. It was its fifth straight month of gains, its longest run since 2005.

The broader Topix <.TOPX> added 0.6 percent to 955.76.

The Standard & Poor's 500 Index <.SPX> ended 0.1 percent higher on Friday after the U.S. government's first estimate of gross domestic product showed it fell at a 1.0 percent annual rate after tumbling 6.4 percent in the January-March period.

Economists had expected a 1.5 percent decline in the second quarter. [ID:nN31416560]

Mitsubishi UFJ jumped 4.6 percent to 592 yen after Japan's biggest bank said its April-June group net profit totaled 75.9 billion yen, helped by gains on its stock portfolio and a gradually improving economy. That was higher than expectations for a net profit of 59.2 billion yen, the average of two analyst forecasts. [ID:nT128065]

Mizuho Financial Group <8411.T> climbed 3.3 percent to 222 yen, after Morgan Stanley raised its rating on Japan's No. 2 bank to overweight from underweight despite the bank's posting its fourth straight quarter in the red on Friday.

We take a more aggressive stance as downside risks, credit costs and valuation losses diminish, skewing the risk balance toward the upside. Mizuho is our top pick in the sector, wrote analyst Graeme Knowd.

Among stocks that fell, Asahi Breweries <2502.T> slipped 1.3 percent to 1,486 yen after the beer maker cut this year's profit forecast after its domestic beer sales fell short of its expectations.

(Reporting by Aiko Hayashi; Editing by Chris Gallagher)