Japan's Nikkei rebounds; Advantest drops as Nvidia's strong growth forecast fails to cheer

TOKYO, Feb 27 (Reuters) - Japan's Nikkei share average edged up on Thursday, rebounding from its declines in previous sessions, but gains were limited as chip company Advantest fell despite a strong growth forecast by its client Nvidia.

The Nikkei .N225 was up 0.15% at 38,198.96 by the midday break, while the broader Topix .TOPX rose 0.49% to 2,729.63.

"Nvidia reported firm results but the market was not overjoyed," said Yusuke Sakai, a senior trader at T&D Asset Management.

"If the market had been more positive to Nvidia's outcome, the U.S. stock futures could have risen. Their muted moves weighed on Japanese stocks," he said.

The market had been awaiting artificial intelligence chip-maker Nvidia's NVDA.O earnings for a cue to lift the Nikkei, which touched a four-month low on Wednesday.

But chip-related stocks, key components for the index, were mixed as the market wanted to watch Nvidia's performance later in the day, strategists said.

Chip-making equipment maker Tokyo Electron 8035.T trimmed early gains to rise 0.81%, providing the biggest boost to the Nikkei.

Chip-testing equipment maker Advantest 6857.T, a supplier to Nvidia, erased early gains to fall 1.27%, weighing on the Nikkei the most.

Chip-related firm Socionext <6526.T> jumped 7.47% to become the biggest gainer on the Nikkei.

Seven & I Holdings 3382.T tanked 11.47% after the operator of convenience store chains said its founding Ito family could not secure the financing required for a $58 billion management buyout, and it would consider a rival offer from Canada's Alimentation Couche-Tard.

Itochu <8001.T> jumped 5.55% after the trading firm said it had ended its consideration of participating in the Seven & I founding family's buyout proposal.

Nissan Motor 7201. jumped 4.81% after a Bloomberg report said the automaker is considering replacing its CEO Makoto Uchida following a worsening in the Japanese automaker's business performance and the collapse of talks to combine with Honda Motor 7267.T .