TOKYO, July 23 (Reuters) - Japan's Nikkei share average rose

on Thursday, as chip-related stocks tracked their U.S. peers

higher overnight, but prospects for an early rate hike from the

Bank of Japan limited gains.

The Nikkei was up 0.47% to 66,424.44 by the midday

break, while the broader Topix edged up 0.39% to

4,048.79.

Overnight, the Philadelphia SE Semiconductor index, a

reference for the Nikkei, ended up 0.4%. Alphabet said

that it expects to spend between $195 billion and $205 billion

in capital expenditures, compared with the earlier plan of $180

billion to $190 billion this year.

"Sentiment improved after Alphabet raised its outlook for

investments, and U.S. chip stocks inched up," said Shuutarou

Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

"On the other hand, bets that the BOJ may raise interest

rates early hurt sentiment. Until now, the central bank tried to

support the economy while raising rates, but that stance may

change, which is negative for stocks led by domestic demand."

In Japan, chip-related shares rose, with Advantest ( ADTTF )

jumping 4.31%. Tokyo Electron ( TOELF ) rose 0.45% and technology

investor SoftBank Group rose 2.09%. Memory maker Kioxia ( KXHCF )

edged up 0.76%.

Bank shares rose as Japanese government bond yields jumped

on bets for a rate hike.

Mizuho Financial Group ( MFG ) rose 2.9% to become the top

percentage gainer on the Nikkei. Sumitomo Mitsui Financial Group ( SMFG )

and Mitsubishi UFJ Financial Group ( MUFG ) rose nearly

2% each.

Shares of retailers, which are supported by domestic demand,

fell, with Takashimaya ( TKSHF ), Isetan Mitsukoshi Holdings ( IMHDF )

and Seven & i Holdings ( SVNDF ) declining more than 2%

each.

Of some 1,500 stocks trading on the Tokyo Stock Exchange's

prime market, 41% rose, 55% fell and 3% traded flat.