TOKYO, Nov 4 (Reuters) - Japanese shares rose on Wednesday as markets cautiously eyed the U.S. presidential election, with gains capped as early results showed tight race between President Donald Trump and Democratic challenger Joe Biden.
The benchmark Nikkei share average rose 1.42% to 23,626.38 by the midday break, after rallying more than 2% in early trade to its highest level since February.
The broader Topix gained 0.82% to 1,621.10.
Investors had initially priced in a possible Democratic sweep by Biden, which could ease political risk while promising a huge boost to fiscal stimulus.
But gains were capped as worries of a contested election returned on indications that Trump was narrowly leading Biden in the vital battleground state of Florida.
Other competitive swing states that will help decide the election outcome, such as Georgia and North Carolina, remained up in the air.
Japanese shares are taking cues from volatile U.S. stock futures, but with selling pressure high after a rally, any negative catalyst could hurt sentiment, a market participant said.
Leading gains among the top 30 core Topix were Daiichi Sankyo Co Ltd up 3.87%, followed by Recruit Holdings Co Ltd. The underperformers among the Topix 30 were Nintendo Co Ltd down 2.05%, followed by SoftBank Group Corp losing 1.33%.
Among the largest percentage gainers in the index were Fujikura Ltd up 26.15%, followed by NTT Data Corp gaining 11.54% after both firms logged better-than-expected earnings results for the fiscal year ending March.
The largest percentage losses in the index were Japan Exchange Group Inc down 5.01%, followed by Nexon Co Ltd losing 2.59% and Z Holdings Corp down by 2.58%.
Elsewhere, the Mothers Index of start-up firm shares gained more than 2.8%, snapping its four consecutive sessions of losses. (Reporting by Eimi Yamamitsu and Tokyo markets team; Editing by Rashmi Aich)