TOKYO, Feb 1 (Reuters) - Japan's Nikkei share average fell on Thursday, after U.S. Federal Reserve chair Jerome Powell's comments doused hopes of a possible interest rate cut in March.

The Nikkei tumbled 0.72% to 36,024.29 by the midday break, after closing out its best January in 26 years on Wednesday.

The broader Topix was down 0.63% at 2535.01.

Powell expressed good news on the battle against inflation at the conclusion of the central bank's two-day meeting on Wednesday but said rate cuts would not be appropriate until there is "greater confidence that inflation is moving" towards the central bank's 2% target.

"It's tough to escape the Fed story as the major driver of price action today," said's senior financial market analyst Kyle Rodda.

"The lower odds of an March cut have the marginal effect of tightening financial conditions, so stocks have to pull back to reflect that."

Japanese indices tracked overnight Wall Street weakness, as U.S. stocks fell after the latest Fed communications, while tech and tech-adjacent megacap stocks dropped further a day after disappointing Alphabet results.

Of the Nikkei's 225 constituents, only 49 rose, while 172 declined.

In individual stocks, domestic earnings remained the dominating theme among the best performers of the morning session.

Daiichi Sankyo Co Ltd climbed 5.97%, followed by TDK Corp gaining 5% and East Japan Railway Co up by 4.79%.

Nomura Holdings was last up 4.69%, after touching its highest levels since 2015 earlier in the session. Japan's biggest brokerage and investment bank company announced on Wednesday it would buy back up to 4% of its own shares after reporting record net revenue from its investment banking division.

Aozora Bank was the worst performer, dropping 21.49%, followed by pharmaceutical company Sumitomo Pharma Co , down 17.74%.

(Reporting by Brigid Riley; Editing by Rashmi Aich)