Japan's Nikkei share average snapped a four-day losing streak on Thursday, tracking overnight Wall Street strength, after the Federal Reserve in an expected move hiked interest rate by 75 basis points, as it tries to rein in U.S. inflation.

However, a murky outlook for the global economy amid continued risks from sharply tighter global monetary policy weighed on investor minds, pulling the benchmark stock gauge well off early highs.

The Nikkei ended the day up 0.4% at 26,431.20, rebounding from its lowest close since May 12 on Wednesday, but that was near the day's lows after the index slid gradually from mid-morning, when it touched a high of 26,947.70.

Traders said profit taking kicked in once the Nikkei approached the psychological 27,000 mark.

The broader Topix gained 0.64% to 1,867.81.

The U.S. S&P 500 index gained 1.45% overnight, but was set to give some of that back on Thursday with e-mini futures pointing to a 0.46% decline at the reopen.

Fed Chair Jerome Powell said that a 75 bp increase "seemed like the right thing to do at this meeting," but added that hikes of that size, the biggest since 1994, were not likely to be "common".

However, he flagged that the resulting slowdown from tighter policy was likely to lead to a rise in unemployment.

"The uncertainty surrounding U.S. monetary policy and the economic outlook have not gone away, and market volatility is likely to remain, so in that environment you can't just jump back in and buy stocks," said Koji Toda, a fund manager at Resona Asset Management.

"It doesn't feel like there are new longs."

Of the Nikkei's 225 components, 167 gained versus 52 that fell, with six flat.

Consumer cyclicals was the best performing sector, up 1.82%. Basic materials was the only sector to fall, slipping 0.13%.

Among heavyweight movers, shares of clothing brand Uniqlo's owner Fast Retailing gained 1.44%, and Toyota Motor jumped 2.88%. Sony Group added 1.53%. (Reporting by Tokyo markets team; Editing by Rashmi Aich and Shailesh Kuber)


Reuters