* Foreign investors stay on sidelines to avoid volatility - trader * Retail investors pick up NEC, Japan Tobacco on bright forecasts * Sharp soars on report citing better-than-expected results By Ayai Tomisawa TOKYO, Jan 31 (Reuters) - The Nikkei share average rose on Friday morning, recouping some of the previous day's steep declines as strong Japanese corporate earnings and solid growth in the United States provided welcome relief for frayed nerves. After days of turmoil in emerging currencies and stocks, a semblance of calm returned to many of the badly hit markets. The hard-hit Turkish lira and South African rand rebounded. Russia's central bank pledged unlimited foreign exchange interventions if the ruble strays outside its target band. The mood in Japan improved further on the back of strong corporate earnings and data showing a jump in manufacturing output in December. NEC Corp surged 11 percent to 300 yen, the highest since May 2010 after its April-December operating profit topped market consensus. Japan Tobacco Inc rose 4.7 percent after raising its operating profit forecast for the year through March to 638.0 billion yen, up from previously forecast 632.0 billion yen thanks to strong overseas cigarette sales. The Nikkei bounced 0.6 percent to 15,099.34 in mid-morning trade after falling 2.5 percent to 15,007.06 on Thursday. Data showed U.S. gross domestic product grew at an annual rate of 3.2 percent in the fourth quarter, in line with expectations. Trader said that despite the relative calm in markets, foreign investors were largely on the sidelines after a sell-off in emerging market assets and slowing growth in China rattled nerves. "They are scared that they might end up losing money if they jump back in the market now amid this volatility," said a senior trader at a European brokerage. "They are not taking large positions until U.S. jobs data are released next week, and until then, retail investors may pick up shares based on their earnings results." The Topix added 0.6 percent to 1,231.11. Recently battered stocks including index-heavyweights and exporters such as SoftBank Corp and Toyota Motor Corp rebounded, rising 1.7 percent and 0.6 percent, respectively. Investors also took heart from news that SoftBank is seeking to become an electricity supplier in Japan, taking a step towards breaking into the heavily regulated Japanese power sector. Sharp Corp soared as much as 6.1 percent to a one-week high of 384 yen after the Nikkei reported that the company is expected to post an operating profit of about 100 billion yen for the year ending March, well ahead of the company's forecast of 80 billion yen. The JPX-Nikkei Index 400, a recently introduced gauge comprised of firms with high return on equity and strong corporate governance, rose 0.5 percent to 11,116.23.