(Updates with closing prices, main movers)

TOKYO, Dec 25 (Reuters) - Japan's Nikkei share average

reversed early losses to end higher on Wednesday, driven by

gains in the auto sector although trade was dominated by retail

investors, who bought back cheap stocks in muted trade with many

global markets closed for the holidays.

The Nikkei rose 0.24% to close at 39,130.43

after falling as much as 0.28% earlier in the session.

The auto sector rose 2.9% and was the best

performer among the Tokyo Stock Exchange's 33 industry

sub-indexes. Nissan Motor ( NSANF ), the Nikkei's top percentage

gainer, surged 8.66%.

The broader Topix also erased losses to end

0.24% higher, at 2,733.86. Toyota Motor ( TM ), which closed

up 4.57%, was the biggest contributor to the Topix rise.

"There was seasonal selling of shares by retail

investors, such as stocks in investment trusts. But once the

equities fell to a certain level, they bought them back, betting

the market will rise in the next session," said Naoki Fujiwara,

senior general manager at Shinkin Asset Management.

Technology investor SoftBank Group rose 1.27%

and was the biggest source of support for the Nikkei. Uniqlo

brand owner Fast Retailing ( FRCOF ) rose 0.26%.

The market struggled to find direction with foreign

investors away for the holiday season, said Fumio Matsumoto,

chief strategist at Okasan Securities.

"This time of the year, local individuals were the only

ones active in trading but they do not want to place active bets

when foreign investors are away and large stocks do not move

actively."

Bank shares fell, with Mitsubishi UFJ Financial Group ( MUFG )

falling 0.44% and Sumitomo Mitsui Financial Group down 0.56%.

Of more than 1,600 stocks trading on the Tokyo Stock

Exchange's prime market, 52% rose, 44% fell and 3% traded flat.