* Broader contagion risks from Greece will be limited - Goldman Sachs * Fast Retailing contributes hefty points to Nikkei index * Suzuki down on profit-taking after president change By Ayai Tomisawa TOKYO, July 1 (Reuters) - Japanese shares edged up on Wednesday as a central bank survey showed big businesses plan to increase capital spending at the fastest pace in a decade, but gains were limited as investors remained cautious on developments in Greece.

Confidence at big Japanese manufacturers unexpectedly improved in the second quarter and is seen rising further, the Bank of Japan survey showed, offering some relief to policy-makers keen to jump-start an economy which had been appearing to back slide again.

The Nikkei share average rose 0.1 percent to 20,262.79 by mid-morning, hovering at a level which was 3 percent off its 18-1/2-year high of 20,952.71 hit last week.

The BOJ's upbeat "tankan" showed improvement in both manufacturers' and service-sector firms' sentiment. Investors also took heart from strong capital spending plans by machinery makers.

"It's a well balanced result which could have pushed the market further up if caution about Greece did not cap risk appetite," said Takuya Takahashi, an analyst at Daiwa Securities.

Goldman Sachs said that Greece-related uncertainty may keep market volatility high in the near-term, but believes broader contagion risks will be relatively limited, and a further correction in Japanese equities would represent a buying opportunity.

The brokerage set a Topix 12-month target at 1,850, reflecting a 13 percent upside from the current level.

Exporters were mixed, with Toyota Motor Corp falling 0.7 percent, Honda Motor Co falling 1.1 percent and Tokyo Electron Ltd gaining 1.8 percent.

Fast Retailing Co rose 1.0 percent, contributing a hefty 24 points to the Nikkei index.

Suzuki Motor Corp dropped 2.7 percent after rising 2.7 percent on the previous day after a media report hinting a president change eased investor concerns over the firm's succession plan.

Earlier on Wednesday, it tumbled as much as 5.2 percent to a 1-1/2-month low after investors took profits from the previous day's gains and started to digest the official announcement by the company after Tuesday's market close that its 85-year-old CEO Osamu Suzuki named his eldest son as the new president.

"The decision was neutral to the stock price, in my opinion," said Yoshihiro Okumura, analyst at Chibagin Asset Management. "The new president will likely succeed his father's overseas strategy, which is key to the company." The broader Topix gained 0.1 percent to 1,631.55 and the JPX-Nikkei Index 400 was flat at 14,716.56.

(Editing by Kim Coghill)