Nikkei tracks Wall Street higher ahead of Fed policy meet

By Kevin Buckland

TOKYO, July 27 (Reuters) - Japanese equities rose on Tuesday, tracking overnight gains in Wall Street as investors cheered upbeat corporate earnings, though caution ahead of this week's U.S. Federal Reserve policy meeting kept the domestic market in check.

The Nikkei share average was up 0.35% at 27,932.08, after scaling above the key 28,000 level for the second day. The index hasn't closed above that level since July 16.

The broader Topix added 0.47% to 1,934.65. The Topix value index rose 0.69%, outpacing the growth index's 0.25% advance.

Among Topix sub-sectors, non-ferrous metals rallied the most with a 2.52% climb. The iron and steel index rose 1.94%, followed by a 1.88% jump in the mining sector.

"The overall strong earnings from corporate America have investors thinking the U.S. recovery is on track, and that should also be a plus for Japan's economy, so value stocks are rising," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management said.

The Fed meeting starts later in the day, and all eyes may be on whether the U.S. central bank expresses any new concerns about high inflation when it concludes its gathering on Wednesday.

"At 28,000 though, investors are adopting a wait-and-see stance before trying to take Nikkei higher," he said, as the earnings season picked up pace in the United States and Japan.

The vast majority of second-quarter U.S. earnings have handily beaten analysts' expectations so far, bumping up the already huge projected growth for the second quarter, according to Refinitiv data.

On the Nikkei, Sumitomo Metal Mining Co (STMNF) led gains with a 4.74% advance, followed by a 4.36% rise in Fujikura and a 3.61% increase in Mitsui Mining and Smelting (XZJCF) shares.

Rakuten Group (RKUNF) led the losers, diving 7.62% after ratings company S&P downgraded the e-commerce firm, citing souring finances tied to the launch of its mobile phone business.

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