TOKYO, July 27 (Reuters) - Japanese equities rose on Tuesday, tracking overnight gains on Wall Street as investors cheered upbeat corporate earnings, but the benchmark Nikkei 225 failed to close above the 28,000 key psychological level for a second straight session. Like Monday, the Nikkei briefly traded above that level but pared gains before the close amid caution ahead of this week’s Federal Reserve policy meeting and a pick-up in both the U.S. and Japanese earnings seasons. The Nikkei share average finished the day 0.49% higher at 27,970.22. It hasn’t closed above 28,000 since July 16. The broader Topix climbed 0.64% to 1,938.04. On Wall Street, the S&P 500, Dow and Nasdaq all posted record closing highs overnight. “The overall strong earnings from corporate America have investors thinking the U.S. recovery is on track, and that should also be a plus for Japan’s economy,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “At 28,000 though, investors are adopting a wait-and-see stance before trying to take Nikkei higher.” Stocks tied to the global economic recovery outperformed, with the Topix value index rising 0.79%, compared to a 0.5% advance in the growth index. Among Topix sub-sectors, airlines rallied the most with a 3.29% climb. Next was non-ferrous metals with a 2.09% jump, followed by a 1.74% advance for iron and steel. The Fed starts a two-day meeting later in the day, and investors will be watching closely for any new hints about when the U.S. central bank would pare back stimulus. Tech giants Apple Inc, Microsoft Corp, Amazon.com Inc and Google parent Alphabet Inc all report earnings with week. On the Nikkei, Sumitomo Metal Mining Co led gains with a 4.49% advance, followed by a 3.96% rise in fishing and frozen-foods company Nippon Suisan Kaisha and a 3.3% increase in airline ANA Holdings. Rakuten Group led the losers, diving 7.31% after ratings company S&P downgraded the e-commerce firm, citing souring finances tied to the launch of its mobile phone business. (Reporting by Kevin Buckland in Tokyo, Editing by Sherry Jacob-Phillips and Subhranshu Sahu) Our Standards: The Thomson Reuters Trust Principles.