Japan's Nikkei rises as tech shares track Wall Street higher

By Junko Fujita

TOKYO, Dec 3 (Reuters) - Japan's Nikkei share average rose on Wednesday, as tech stocks tracked Wall Street's overnight gains on growing prospects of a U.S. interest rate cut this month.

The broader Topix index .TOPX fell, as banks lost ground after a sharp rally driven by increasing bets of a Bank of Japan rate hike as soon as this month.

The Nikkei .N225 advanced 0.7% to 49,670.09 by 0151 GMT, while the broader Topix fell 0.37% to 3,328.67.

"Investors bought stocks that became cheap and sold those which had risen," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

Chip-related shares jumped, with Advantest 6857.T and Tokyo Electron 8035.T rising 4.49% and 3.99%, respectively. Renesas Electronics 6723.T jumped 6.92%. Technology investor SoftBank Group 9984.T rose 3.83%.

U.S. stocks closed higher on Tuesday to record their sixth gain in seven sessions, buoyed by gains in technology shares as expectations the Federal Reserve will cut interest rates next week remain elevated. .N

Shares of Japan's biggest banks fell, with Mitsubishi UFJ Financial Group 8306.T and Sumitomo Mitsui Financial Group 8316.T slipping 2% each.

Bank shares had rallied earlier this week after BOJ Governor Kazuo Ueda gave the clearest hint so far on a rate hike, saying the central bank would consider the "pros and cons" of rising rates at its December 18-19 meeting.

Auto shares also weighed on the Topix amid concerns recent gains in the yen would cut into profits. Toyota Motor 7203.T and Honda Motor 7267.T fell 1% and 0.63%, respectively, while Nissan Motor 7201.T eased 0.81%.

Of the more than 1,600 shares trading on the Tokyo Stock Exchange's prime market, 26% rose, 69% fell and 3% traded flat.