TOKYO, Nov 4 (Reuters) - Japanese shares rose on Wednesday as markets cautiously eyed the U.S. presidential election results, while gains were capped as voting projections showed a tight race between President Donald Trump and Democratic challenger Joe Biden.
The benchmark Nikkei share average .N225 rose 1.72% to close at 23,695.23, after rallying more than 2% in early trade to its highest level since February.
The broader Topix .TOPX gained 1.2% to 1,627.25.
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 after Trump took the lead over Biden in the vital battleground of Florida and other U.S. swing states. the outcome is still not concrete, stocks seem to be moving in the direction of pricing in a higher probability of a Trump win," said Fumio Matsumoto, chief strategist at Okasan Securities.
Incoming election results "indirectly took Japan's renewable energy-related stocks lower," such as Renova 9519.T , Matsumoto said.
"Although Biden's (clean energy) plan does not have direct link to Japan, there were speculations that a Biden presidency would lead to Japan's shift from coal-fired thermal power to renewable energy," he said.
Renova 9519.T , a company engaged in renewable energy generation business, fell 6.36%.
Among the largest percentage gainers in the index were Fujikura Ltd 5803.T up 27.92%, followed by NTT Data Corp 9613.T gaining 11.04 % after both firms logged better-than-expected earnings results for the fiscal year ending March.
Elsewhere, the Mothers Index .MTHR of start-up firm shares snapped four consecutive sessions of losses and jumped more than 5.3%, marking its biggest daily gain since early May.
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