(Updates for market close)

By Brigid Riley

TOKYO, Nov 20 (Reuters) - Japan's Nikkei share average

fell on Wednesday as caution set in ahead of U.S. AI darling

Nvidia's ( NVDA ) results and outlook later in the day, which some fear

could be below market expectation.

The Nikkei finished 0.2% lower at 38,352.34, while

the broader Topix closed down 0.4% at 2,698.29.

Nvidia ( NVDA ), the world's most valuable company, will

report its third-quarter earnings after Wall Street closes on

Wednesday, a key demand test for chips and the sustainability of

the AI euphoria.

Nvidia ( NVDA ) options implied an 8.5% swing for the shares in

either direction following the results, according to data from

options analytics service ORATS.

"Owing to the company's massive size, (that) will influence

how futures trade after Wall Street's cash close and cause

ripple effects going into the Asian open tomorrow morning," said

Kyle Rodda, senior financial market analyst at Capital.com.

In Japan, many major chip-related shares edged down despite

their U.S. peers rising on Tuesday ahead of Nvidia's ( NVDA ) results,

although losses narrowed during afternoon trade.

Tokyo Electron ( TOELF ) fell 0.6% to become the

second-biggest drag on the Nikkei, behind insurance firm Tokio

Marine Holdings ( TKOMF ), which fell 7%.

AI-focused startup investor SoftBank Group shed

0.4%.

Meanwhile, Advantest ( ADTTF ), which counts Nvidia ( NVDA ) among its

customers, rebounded to add 1.1%.

Shares of Seven & I Holdings ( SVNDF ) jumped 6.5% following

a report that the founding family was aiming to take the

retailer private this financial year.

Tech and entertainment conglomerate Sony Group ( SONY )

gained 2.8%. Reuters reported on Tuesday that Sony ( SONY ) was in talks

to acquire the publishing, anime and gaming powerhouse Kadokawa

Corp. ( KDKWF ) Shares of Kadokawa ( KDKWF ) finished up about 16% on

Wednesday.

Among other individual stocks, Tokyo Gas ( TKGSF ) surged as

much as 15% after a regulatory filing showed on Tuesday that

U.S. activist investor Elliott Management had taken a 5.03%

stake in the company. It ended up 13% to become the biggest

percentage gainer in the Nikkei.