Japan's Nikkei muted as airlines offset losses in chip-related stocks

TOKYO, May 26 (Reuters) - Japan's Nikkei share average struggled for momentum on Thursday after two straight sessions of falls, as gains in airline and railway stocks countered losses in chip-related equities.

The Nikkei .N225 inched higher 0.03% to 26,685.71 by the midday break, after swinging between small gains and losses. The broader Topix .TOPX gained 0.32% to 1,882.66.

Wall Street closed higher overnight, boosted after minutes from the Federal Reserve's latest monetary policy meeting showed policymakers unanimously felt the U.S. economy was very strong as they grappled with reining in inflation without triggering a recession.

"The Fed minutes were not as hawkish as investors had expected, and that boosted U.S. equities and Japanese markets followed," said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

"As the global economic outlook remains unclear and with the absence of domestic market-moving cues, investors tend to shift their focus every day and scoop up cheap stocks."

Sectors that are likely to benefit from an economic recovery rose, with airlines .IAIRL.T jumping 2.65% to lead gains among the Tokyo Stock Exchange's 33 industry sub-indexes.

The real estate sector .IRLTY.T rose 1.61%, with developer Mitsui Fudosan 8801.T jumping 3.88%.

Railway operator Keio 9008.T climbed 4.55%, helping the sector .IRAIL.T. rise 1.3%.

Chip-related Tokyo Electron 8035.T and Advantest 6857.T weighed on the Nikkei the most, falling 2.52% and 2.93% respectively. Robot maker Fanuc 6954.T lost 1.87%.

There were 147 advancers on the Nikkei index against 76 decliners.

The volume of shares traded on the Tokyo Stock Exchange's main board was 0.57 billion, compared with the average 1.26 billion in the past 30 days.
Reporting by Junko Fujita; Editing by Subhranshu Sahu

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