(Corrects paragraph 5 time to 0600 GMT, not 1600 GMT)
TOKYO, Jan 29 (Reuters) - Japanese shares bounced back modestly on Wednesday, partially clawing back hefty losses from the previous two sessions, although gains were limited by worries over the fast-spreading coronavirus from China.
The Nikkei share average rose 0.71% to 23,379.40, while the broader Topix added 0.45% to 1,699.95.
Traders called it a mere technical rebound, noting the lingering concerns about the virus outbreak and its broader economic and market impact.
The death toll from the China-linked virus rose sharply to 132 on Wednesday with nearly 1,500 new cases, heaping pressure on Beijing to control the outbreak as U.S. officials said the White House was weighing whether to suspend all flights to the country.
While mainland Chinese markets will remain shut this week, Hong Kong's Hang Seng dropped 2.6% by 0600 GMT as markets resumed trade after the Lunar New Year break. The size of fall was not out of line with its peers in the region.
"Some investors swiftly bought back Tokyo-listed shares as Hong Kong's drop was not as massive as they had feared," said Takehiko Masuzawa, head of sales trading for Japanese clients at Macquarie Capital Securities.
Shippers climbed 2.7% to become the best performing sector among the Tokyo Stock Exchange's 33 subindexes.
Nippon Yusen KK jumped 3.2% after the Nikkei newspaper reported that Japan's largest shipping company was likely to book 20 billion yen ($182 million) in recurring profit for the October-December period, the highest quarterly figure in three years.
The company is due to announce its earnings results for the April-December period on Friday.
Unizo Holdings gained 6.6% after U.S. private equity firm Blackstone Group sweetened its proposed offer for the company by 12% to 191.6 billion yen ($1.75 billion), topping a rival bid from U.S. buyout fund Lone Star.
Teikoku Sen-i advanced 3.4% after British investor Asset Value Investors submitted proposals to boost its dividend and conduct a share buyback.
M3 rose 2.7% after the medical information services provider posted generally positive earnings.
Obic dived 5.1% after the system integration service operator's quarterly earnings fell short of market expectations.
A number of Japanese firms, including Fanuc and Advantest, are due to announce their earnings results after market hours on Wednesday.
Telecom network maker Anritsu Corp declined 4.4% after U.S. chipmaker Xilinx Inc declined 9% in after hour trading on disappointing results.
Murata Manufacturing settled 0.6% lower after Xilinx's earnings miss offset any boost from Apple Inc's upbeat results.
Some investors were on the sidelines before the U.S. Federal Reserve's policy announcement later in the day.
The Fed is expected to reiterate its desire to keep rates unchanged at least through this year, though some analysts wonder if it could be shaken off autopilot if the virus outbreak deepens.
$1 = 109.7000 yen Reporting By Tomo Uetake and Hideyuki Sano; Editing by Shounak Dasgupta and Subhranshu Sahu