* Pharma, real estate and construction sectors outperform
* Miraial soars after raising profit, dividend outlooks
By Daniel Leussink and Ayai Tomisawa
TOKYO, Feb 27 (Reuters) - Japan's Nikkei closed up on Wednesday as investors bought into defensive stocks such as pharmaceutical and real estate firms, and took some money off the table from machinery shares that had rallied on progress in U.S.-China trade talks.
The Nikkei share average .N225 gained 0.5 percent to 21,556.51, not far from its more than 10-week high reached during Tuesday's session.
The broader Topix .TOPX added 0.2 percent to 1,620.42, with advancing issues outnumbering declining ones 1,153 to 893.
"Shares that had been pressured on worries about U.S.-China trade disputes were bought back early this week, so there seems to be profit-taking going on," said Takashi Ito, an equity market strategist at Nomura Securities.
"Instead, they are picking up companies which rely on domestic demand."
Ito said investors are awaiting developments in the U.S.-China trade negotiations, while also adjusting their positions in line with the recent cautious policy stance of the U.S. Federal Reserve.
On Tuesday, Fed Chairman Jerome Powell told the U.S. Senate Banking Committee that the central bank would remain "patient" in deciding on further interest rate hikes. said the dollar "tends to be pressured in this environment so the market is increasingly paying attention to the risk that the yen will strengthen. This situation makes investors want to buy domestic-demand sensitive stocks."
Wednesday's losers included companies with high exposure to the Chinese market, which had rallied after President Donald Trump said on Sunday he would delay an increase in U.S. tariffs on Chinese goods.
Factory automation equipment maker Keyence Corp 6861.T declined 1.2 percent, Yaskawa Electric 6506.T shed 2.4 percent and machinery maker Komatsu Ltd 6301.T fell 1.3 percent. products maker Miraial 4238.T jumped 6.4 percent after it raised its net profit outlook to 1.25 billion yen from 950 million yen for the year ended January. It also raised its annual dividend payout forecast to 30 yen per share from 20 yen. (Editing by Shri Navaratnam and Richard Borsuk)
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