TOKYO, Oct 29 (Reuters) - Japan's Nikkei share average

reversed early losses to pull ahead by midday on Tuesday, buoyed

by favourable domestic earnings reports and overnight Wall

Street gains as investors hit pause on election-related trades.

Prime Minister Shigeru Ishiba's coalition lost its

parliamentary majority in Sunday's election in what analysts say

is a negative for equities, raising uncertainty over the path

ahead for policy and the economy.

But market focus appeared to have moved on from politics for

now, with the Nikkei extending gains after rallying close to 2%

on Monday, given an already sizeable fall in shares last week as

investors priced in the risk scenario.

The Nikkei rose 0.6% to 38,819.51 by the midday

break, while the broader Topix was up 0.8% at 2,679.32.

"Equities prices have declined significantly enough, so I

think there's some re-evaluation happening now," said Kenji Abe,

chief strategist at Daiwa Securities.

Financial shares outperformed on Tuesday, tracking their

U.S. peers' gains after a rise in U.S. Treasury yields

overnight.

Banks led sector gains with a 2.5% rise, followed

by security firms climbing 2%, and insurers

adding 1.8%.

Wall Street closed higher on Monday ahead of a packed week

of earnings from megacap companies and the final stretch before

the Nov. 5 presidential election.

Attention is now on company earnings with big names in both

the U.S. and Japan set to report this week, ahead of a key jobs

report from the world's largest economy on Friday. Google parent

is due to report later on Tuesday.

A portion of Japan's technology stocks edged up in morning

trade, with AI-focused startup investor SoftBank Group

rising 2.2% and chip-testing equipment maker Advantest ( ADTTF )

climbing 1.5%.

Domestic corporate revenue announcements also helped pull

the Nikkei higher as the earnings season revs up this week.

Speciality chemicals company Nitto Denko ( NDEKF ) surged

4.3% to land among the Nikkei's top percentage gainers, along

with pharmaceutical firm Shionogi & Co ( SGIOF ), up 3.4%.