(Updates at 0533 GMT)

TOKYO, Nov 6 (Reuters) - Japan's Nikkei share average

rose 2% on Wednesday, with chip and defence shares leading

gains, while market participants keenly awaited the outcome of

the U.S. presidential election.

The Nikkei was up 2.03% at 39,256.77 as of 0533 GMT,

while the broader Topix gained 1.55% at 2,705.62.

The Nikkei accelerated gains as the dollar strengthened

against the yen. The dollar was last up 1.34 % to 153.64 yen

.

A weaker yen tends to boost Japanese exporters' overseas

earnings when repatriated.

"The market is looking ahead of the election outcome

already, with the dollar gaining and Japanese stocks rising,"

said Yugo Tsuboi, chief strategist at Daiwa Securities.

Trump took the early lead over Democrat Kamala Harris as

solid Republican-leaning states reported first, but critical

battleground races, the handful of states likely to decide the

election, were unlikely to be called for some time yet.

In Japan, technology stocks rose, with chip-testing

equipment maker Advantest ( ADTTF ) jumping 7% to become the

biggest boost to the Nikkei

Defence stocks also rose, with IHI surging 18%

as the heavy machinery maker raised its annual net profit

forecast for the fiscal year ending March 2025.

Peers Mitsubishi Heavy Industries ( MHVYF ) and Kawasaki

Heavy Industries ( KWHIF ) jumped 9.5% and 8%, respectively.

"This is a typical Trump trade," said Takashi Hiroki,

chief strategist at Monex, as Trump would ask Japan to rely less

on the U.S. for its own defence.

Toyota Motor ( TM ) reversed early losses to rise 1.9%

as the automaker posted its first quarterly profit drop in two

years on Wednesday.

However, Honda Motor ( HMC ) tanked 6%, as the automaker

reported a surprise 15% drop in second-quarter operating profit.

(Reporting by Junko Fujita and Brigid Riley; Editing by

Subhranshu Sahu, Sherry Jacob-Phillips and Varun H K)