Japan's Nikkei recovers from early losses as chip stocks rebound, retailers rise

By Kevin Buckland

TOKYO, April 20 (Reuters) - Japan's Nikkei share average flipped from early losses to end the morning session with a small gain on Thursday, as chip-related shares recovered and retailer stocks rallied amid an increase in foreign visitors.

The Nikkei entered the midday break up 0.09% at 28,631.53, edging back toward Tuesday's nearly six-week high of 28,698.22. The index fell 0.57% at 28,442.45 earlier in the day, weighed down by weakness on Wall Street.

The broader Topix remained slightly in the red, finishing the morning down 0.06% at 2,039.25, but well above early losses of 0.55%.

A weakening yen contributed to the improving mood over the course of the morning, weakening as much as 0.18% to the cusp of 135 per dollar.

"Although the market is cautious after the Nikkei reached a high on Tuesday, there isn't really any major negative news to drive a decline, and the number of losing shares should lessen over the course of the session," said Maki Sawada, a strategist at Nomura Securities.

Investors may adopt a more cautious stance in the afternoon, with closely watched chip-making equipment maker Disco Corp reporting earnings later in the day, she said.

Chip-testing equipment maker Advantest Corp gained 2.2% and chip-making equipment giant Tokyo Electron Ltd rose 1.09%, each adding about 17 points to be the no. 2 and 3 supports for the Nikkei. They began the day in the red, tracking declines in U.S. peers.

Uniqlo store operator Fast Retailing Co Ltd delivered about 41 points with a 1.25% advance.

Fellow retailer Takashimaya Co Ltd was the biggest percentage gainer, jumping 3.26%.

Among Tokyo Stock Exchange industry sectors, banking and insurance were among the best performers, rising more than 0.5% each.

On the Nikkei, 118 stocks advanced and 99 fell, with eight flat. (Reporting by Kevin Buckland; Editing by Varun H K)