Japan's Nikkei rises, but Advantest drags despite Nvidia growth outlook

Updates with closing prices

TOKYO, Feb 27 (Reuters) - Japan's Nikkei share average closed higher on Thursday, recovering from a decline in the previous session, though gains were capped as chipmaker Advantest fell despite a strong growth forecast from its client Nvidia.

The Nikkei .N225 rose 0.3% to close at 38,256.17, after falling as much as 0.2% during the session. The broader Topix .TOPX climbed 0.73% to 2,736.25.

Markets had been awaiting earnings from artificial intelligence chip-maker Nvidia NVDA.O for a boost to lift the Nikkei, which hit a four-month low on Wednesday.

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

Japanese chip-related stocks, key components of the index, showed mixed movements as the market awaited Nvidia's share performance later in the day, strategists said.

Chip-making equipment maker Tokyo Electron 8035.T trimmed early gains to end nearly 1% higher, providing the biggest boost to the Nikkei.

Chip-testing equipment maker Advantest 6857.T, a supplier to AI darling Nvidia, erased early gains to slump about 2%, weighing on the Nikkei the most. The stock has been subject to fluctuations due to broader market trends.

Socionext <6526.T> jumped 12.69% to become the biggest percentage gainer in the Nikkei after the chip-related firm announced a partnership with Google Quantum AI.

Shares of Seven & I Holdings 3382.T tanked 11.69% after the operator of convenience stores said 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 4.34% after the trading firm said it had ended its consideration of participating in the Seven & I founding family's buyout proposal.

Nissan Motor 7201. surged 3.65% after a report suggested the automaker is considering replacing CEO Makoto Uchida due to a decline in business performance and the collapse of talks to merge with Honda Motor 7267.T.