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

gained on Thursday as Wall Street's rise boosted sentiments,

even as a firmer yen on the back of strengthening bets for an

interest rate hike by the Bank of Japan (BOJ) weighed.

The Nikkei rose nearly 1% in early trade before

narrowing gains, up 0.2% to 38,888.04 by the midday break. The

broader Topix also added 0.2% to 2,751.18.

All three major U.S. stock indexes ended Wednesday higher,

rebounding from declines earlier in the session as investors

brushed off disappointing Alphabet earnings and

weighed the prospect of future rate cuts from the Federal

Reserve.

A strong performance by U.S. tech shares and gains by AI

darling Nvidia ( NVDA ) trickled through to boost Japan's

heavyweight chip-related stocks. Advantest ( ADTTF ), which

counts Nvidia ( NVDA ) among its customers, added 1.1%, while Tokyo

Electron ( TOELF ) advanced 1.3%.

The yen's strength, however, dented overall gains, with the

Japanese currency climbing as high as 151.81 against the U.S.

dollar as one of BOJ's most hawkish policymakers, Naoki Tamura,

said the central bank must raise rates to at least 1% by the

second half of fiscal 2025.

A stronger domestic currency hurts exporter shares and

investor sentiment as it decreases the value of overseas profits

when firms repatriate them to Japan.

Other than the impact from higher U.S. stocks and a stronger

yen, it was "hard to see any other trends," likely keeping the

Nikkei in its recent range in a "directionless" day of trade,

said Kazuo Kamitani, an equities strategist at Nomura

Securities.

The domestic earnings season, however, continued to produce

big moves among individual shares.

Renesas Electronics ( RNECF ) surged 12.2% to be the top

percentage gainer on the Nikkei after the chipmaker announced

its revenue report and Nomura Holdings ( NMR ), Japan's biggest

brokerage, gained 6.2%.

Honda ( HMC ) slid 4.1%, while Nissan Motor ( NSANF ) added

2.1% amid continued news that Nissan ( NSANF ) may step back from merger

talks.