TOKYO, May 10 (Reuters) - Japan's Nikkei share average

rebounded on Friday, buoyed by positive earnings and Wall Street

gains overnight, although profit-taking capped further advances.

The Nikkei was up 0.62% at 38,311.63 by the midday

break, after rising more than 1% earlier in the session.

The broader Topix was up 0.68% at 2731.86.

The benchmark index has seen a choppy week of trading after

hitting a three-week high of 38,863.14 on Tuesday.

Higher expectations for U.S. interest rate cuts following

softer-than-expected jobs growth in April has brightened

investor sentiment this week.

Wall Street gave a fresh boost, rising after weekly jobless

claims data added to hopes for interest-rate cuts.

That combined with solid local earnings gave the Nikkei the

push needed to try higher again.

But the rally was reined in as investors jumped in to lock

in profits with the index near the psychologically-significant

39,000 level.

"It does look to me like we've entered a period of

consolidation," said Tony Sycamore, a market analyst at IG.

"But when you're looking at the bigger picture, a period of

consolidation is not a bad thing. It generally means the

market's rebuilding energy."

The index rose to an all-time high of 41,087.75 earlier this

year before retreating last month.

Among individual shares, earnings reports largely decided

the winners and losers of the morning session.

Gaming firms stood out, with Konami Group ( KNAMF ), up 9.3%,

leading gains. Bandai Namco Holdings ( NCBDF ) and Nintendo ( NTDOF )

also advanced, up 6.3% and 3.5%, respectively.

Electrical equipment manufacturer Daikin Industries ( DKILF )

surged 9%.

Chip-related Screen Holdings ( DINRF ) fell to the bottom

with a 10.9% decline. Shares of Panasonic Holdings ( PCRFF ) were

5.5% lower after the energy unit of the firm missed its

operating profit guidance for the business year.