TOKYO, July 26 (Reuters) - Japanese shares ended higher on Monday, catching the tailwind from a bounce in global peers on positive corporate earnings, though gains were curbed by concerns that domestic COVID-19 infections could further dampen the country’s economic recovery. Nikkei average rose as much as 1.77% in early trade after a four-day weekend that marked the opening of Tokyo Olympics, before shedding a part of the gains to close 1.04% higher at 27,833.29. The broader Topix closed 1.11% higher at 1,925.62, after having risen 1.74% earlier in the session. During the long weekend in Japan, all three major U.S. stock indexes closed at record highs. “The market was strong during the U.S. and European trades. As soon as Tokyo opened, it turned softer, which underscores the cautious mood here. With coronavirus cases rising, investors sell into rallies rather than bidding up,” Tomoichiro Kubota, a senior market analyst at Matsui Securities said. Tokyo reported 1,763 cases on Sunday, up 75% from a week ago. Nidec fell 3.2% as some investors were disappointed after the motor maker failed to upgrade its annual profit outlook despite the solid rise in quarterly profit. “The results were pretty good, but its share reaction suggests shares that have very high investor expectations may have hard time advancing gains,” Matsui Securities’ Kubota said. Elsewhere, Tokyo Steel Manufacturing jumped 9.3% after the company boosted earnings forecast sharply. That helped to boost other steelmakers’ shares, with industry leader Nippon Steel up 3.7%. Toray gained 5.2% after Nikkei business daily reported that the chemical company’s quarterly profit had likely soared. The firm will announce its earnings next week. Morito, a trading company that has skateboard-related items in its lineup of goods, jumped 11.9% after two Japanese skateboarders won gold medals at the Olympics. SoftBank Group bucked the trend to fall 2.1%, dragged lower by worries about the firm’s exposure to Didi and other Chinese tech firms as China intensifies crackdown on them. (Reporting by Hideyuki Sano, Editing by Sherry Jacob-Phillips) Our Standards: The Thomson Reuters Trust Principles.