TOKYO, Aug 23 (Reuters) – Japanese stocks edged higher on Friday, drawing support from U.S. markets, with investors eyeing a speech later in the global day from Federal Reserve Chairman Jerome Powell for any clue on further easing in U.S. interest rates.

The Nikkei share average was up 0.28% at 20,686.85 as of 0140 GMT.

Travel services provider H.I.S. Co advanced 4.6% after Nikkei Business reported that it plans to withdraw from a financially taxing takeover bid for hotel operator Unizo Holdings, which has received a higher offer from an investment group.

Shares linked to the defence industry gained on an expected increase in regional tensions after South Korea on Thursday opted to scrap an intelligence-sharing pact with Japan, deepening a dispute which has undercut security cooperation over North Korea.

Defence equipment maker Ishikawa Seisakusho Ltd rose 9.3% and Howa Machinery Ltd, which makes firearms, gained 4.9%. Defence communication equipment manufacturer Tokyo Keiki Inc advanced 3.9%.

But Hanatour Japan Co, which operates holiday tours to Japan from South Korea, was down 5.6% with increasing friction between Seoul and Tokyo expected to negatively affect inbound tourism.

Mitsubishi Pencil Co climbed 6% after it announced a buy back of up to 1.68% of its own shares through March 24, 2020.

The largest percentage gainer in the index was FamilyMart UNY Holdings Co Ltd, which was up 5.9%. The biggest percentage loser was Taiyo Yuden Co Ltd, last down 2.9%.

There were 141 advancers on the Nikkei index against 75 decliners.

The broader Topix gained 0.27% to 1,502.07. (Editing by Simon Cameron-Moore)