Japan's Nikkei rallies on earnings in unsteady trade before Sunday election

By Satoshi Sugiyama

TOKYO, Feb 6 (Reuters) - Japan's Nikkei share average rose on Friday, recovering from early losses to extend a weekly gain, as investors took in quarterly earnings from major companies while remaining cautious ahead of a crucial election on Sunday.

The benchmark Nikkei 225 Index .N225 rose 0.8% to close at 54,253.68, capping a 1.7% weekly gain. The broader Topix .TOPX climbed 1.3% to 3,699.

Earnings season is in full swing in the world's fourth-largest economy, and markets are on tenterhooks ahead of a vote on Sunday, with polls pointing to a decisive win for the ruling coalition of Prime Minister Sanae Takaichi, who is viewed as a fiscal dove.

Isetan Mitsukoshi 3099.T rallied 7.1% after the department store operator lifted its full-year outlook on Friday. Toyota Motor 7203.T jumped 2% after announcing a leadership shakeup and revising up its full-year forecast.

Food additive maker Ajinomoto 2802.T soared 13.4%, the biggest daily percentage change since October 2008, after upgrading its full-year outlook on Thursday.

On the flip side, Subaru 7270.T sank 5.5% after the automaker said U.S. tariffs weighed on its full-year outlook.

Soy sauce maker Kikkoman 2801.T was the worst percentage loser on the Nikkei with a 7.5% drop after reporting results on Thursday.

The impact of earnings, recent sharp share declines, and the weekend's impending election contributed to a sense of tug-of-war in Tokyo's equity markets, said Maki Sawada, an equities strategist at Nomura Securities.

"We continue to see significant individual stock-picking movements, with some stocks rising quite sharply and others falling," Sawada added.

Shares of Japanese pharmaceutical companies slumped after U.S. President Donald Trump's website offering discounted prescription medicines for Americans went live. Chugai Pharmaceutical 4519.T, a Roche-affiliated biotech company, sank 5.7%.

There were 164 advancers on the Nikkei index against 58 decliners.