(Updates for market close)

By Brigid Riley

TOKYO, Jan 29 (Reuters) - Japan's Nikkei snapped a

three-day losing run on Wednesday, tracking Wall Street's

recovery from a sell-off triggered by Chinese startup DeepSeek's

AI model launch, with the focus now on major U.S. earnings and

the Federal Reserve's rate decision.

The Nikkei closed 0.6% higher at 39,232.75. The

broader Topix gained 0.6% to finish at 2,773.97.

U.S. stocks ended higher on Tuesday, with Nvidia ( NVDA )

and other AI-linked tech shares bouncing back from sharp losses

the previous day.

Japan's tech shares seesawed on the day as investors

remained on edge but ended on a strong note. Chip-testing

equipment maker Advantest ( ADTTF ), which counts Nvidia ( NVDA ) among

its customers, rallied 4.4%, giving the Nikkei the largest lift.

The focus now turns to the earnings reports of big U.S. tech

companies, with more than half of the Magnificent 7 reporting

this week.

U.S. tech firms' capital investment strategies will likely

be under scrutiny after DeepSeek said it was able to develop its

AI model for a fraction of the cost, said Hiroshi Namioka, chief

strategist at T&D Asset Management.

"The Nasdaq rose (overnight), but it doesn't feel like you

can let your guard down just yet," he said.

Markets also await the Fed's monetary policy decision later

on Wednesday. The Fed is widely expected to hold interest rates

steady, but the focus will be on its commentary for clues on the

timing of the next rate cut.

Tokyo Electron ( TOELF ) and AI-focused startup investor

SoftBank Group both added a little over 2%. Chipmaker

Renesas Electronics jumped 5.9%, the most on the

Nikkei.

Uniqlo parent Fast Retailing ( FRCOF ) climbed 1.3%, while

entertainment conglomerate Sony Group ( SONY ) rose 3.8%.

Shin-Etsu Chemical ( SHECF ) lost 4.3% after the silicon

wafer maker kept its earnings forecast for the fiscal year

ending March 2025 unchanged.