TOKYO, July 21 (Reuters) - Japanese shares snapped a five-day losing streak on Wednesday as investors bought cyclical stocks ahead of a long weekend that will mark the start of the Tokyo 2020 Olympics, following a rebound in U.S. stocks. Concerns that the event could worsen Japan’s COVID-19 outbreak and lead to political instability have, however, weighed on the market. The Nikkei share average rose 1.75% to 27,870.66, crossing past the 200-day moving average, a key support, of 27,714. The market will be closed for a national holiday until Monday as Tokyo 2020 Olympic Games begin on Friday. The broader Topix gained 1.54% to 1,917.85, with all of its 33 industry subindexes rising, led by cyclical shares, such as shippers, airlines and carmakers . “Japan has underperformed global peers year-to-date on the re-opening trade but we expect the gap to narrow as the domestic vaccine rollout gathers momentum,” said Daisuke Nomoto, Global Head of Japanese Equities at Columbia Threadneedle Investments in Boston. “Japanese domestic economy will benefit from pent-up savings and employee compensation back to pre-Covid levels. Japan will also be a key beneficiary of global recovery and will experience a healthy earnings recovery supported by attractive valuations,” he added. Hopes for the earnings season, which will gather pace from the next week, underpinned the market. Makers NOK Corp jumped more than 10% after the maker of oil seals bumped up its profit outlook sharply. Among large-caps, Nissan Motor rose 3.2% while Panasonic gained 3.2%, while Nidec rose 2.7% ahead of its earnings announcement later in the day. Bucking the trend, homebuilder Tama Home plunged 11% after media report the company was effectively banning its workers from getting COVID-19 vaccines, a claim the company denied last week. (Reporting by Hideyuki Sano; editing by Vinay Dwivedi) Our Standards: The Thomson Reuters Trust Principles.