* Toshiba falls after sources say it faces up to $3 bln in charges over accounting scandal
* Some investors stay cautious due to mixed Chinese shares - traders
By Ayai Tomisawa
TOKYO, July 16 (Reuters) - Nikkei shares rose to a two-week high in early trade in Tokyo on Thursday as overnight comments on U.S. interest rates from Federal Reserve Chair Janet Yellen reinforced expectations that the U.S. economy is on track and steadily improving.
Also helping the mood was news that Greek parliament had approved a bailout plan.
The Nikkei share average .N225 rose 0.5 percent to 20,556.87 in midmorning trade after climbing to 20,592.75, the highest since July 2.
Yellen said she expects the U.S. economy to grow steadily for the rest of the year, allowing the Fed to raise interest rates, but gave no direct hint on the timing or pace of a hike.
"Yellen's comment gave no major news and did not change the widely perceived view that the Fed will likely raise rates sometime this year," said Takuya Takahashi, a strategist at Daiwa Securities.
"If the rates are increased in small increments while U.S. fundamentals are improving, the stock market should take it as a positive thing, and that's what the market is expecting."
Index-heavy stocks Fast Retailing Co 9983.T gained 1.7 percent while KDDI Corp 9433.T climbed 1.9 percent.
While the overall stock market gained as the dollar rose 0.1 percent to 123.88 yen JPY= , shares of major exporters were mixed due to lacklustre interest from retail investors, who tend to scoop up stocks when they are cheap and not when the market is strong, traders said.
Traders added that the Chinese market's mixed performances have also kept some investors on their toes.
Toyota Motor Corp 7203.T rose 1.7 percent, but Honda Motor Co 7267.T dropped 0.6 percent and Panasonic Corp 6752.T shed 1.7 percent.
Underperforming the market was Toshiba Corp 6502.T , down more than 2 percent after sources said it expects 300-400 billion yen ($2.4-3.2 billion) in charges related to improper accounting in an expanding probe.
The broader Topix .TOPX gained 0.4 percent to 1,653.44 and the JPX-Nikkei Index 400 .JPXNK400 added 0.4 percent to 14,936.02. (Editing by Ryan Woo)