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TOKYO, Sep 21 (Reuters) The Nikkei average inched up 0.15 percent on Thursday, rebounding from Wednesday's five-week closing low, as investors picked up TDK Corp. and other technology stocks following a rally on Wall Street.

But bank shares dropped on concern about future profit growth, capping any aggressive gains and pulling down the broader TOPIX index.

Shares of Toyota Motor Corp. were flat even after a higher profit forecast, while Shin-Etsu Chemical Co. Ltd. climbed for a sixth straight session after UBS raised its price target.

''New York stocks were higher and the yen is soft, which encouraged investors to buy technology stocks,'' said Yasuo Yabe, director of sales at Meiwa Securities.

But Masayoshi Okamoto, head of dealing at Jujiya Securities, said the need to lock in profits ahead of September book closing kept the market from advancing further.

''Losses in the TOPIX can be mainly attributed to selling by domestic institutional investors who are unloading stocks ahead of their book closing,'' he said.

The Nikkei finished the morning session 23.37 points higher at 15,742.04. The benchmark ended at a five-week closing low on Wednesday. The TOPIX lost 0.41 percent to 1,563.74.

Kenji Kobata, managing director in the research department at Ace Securities Co. Ltd., said orders placed through foreign brokerage firms showed an intention to sell, adding to pressure from recent economic data that showed signs of weakness and raised concern about a slowdown in the Japanese economy.

''Such economic concern may be reflected in bank shares,'' he said. ''If we cannot expect economic expansion, interest rates will not rise'' to benefit bank lending businesses.'' Merrill Lynch said in a report on Wednesday that selling in bank shares is partly due to investors switching to technology stocks after the recent depreciation of the yen.

Merrill also said selling might have been triggered by Shinzo Abe's election as ruling party leader on Wednesday in a widely expected move, setting the stage for him to be chosen as prime minister next week.

''A view that the Abe administration may not be as aggressive about structural reforms as the Koizumi administration led to the declines in bank stocks,'' Merrill said, referring to outgoing prime minister Junichiro Koizumi.

Industry leader Mitsubishi UFJ Financial Group Inc. was down 2.1 percent at 1.42 million yen, while rival Mizuho Financial Group Inc.

fell 1.4 percent to 877,000 yen.

Lower oil prices helped Bridgestone Corp. and others to gain.

U.S. crude oil futures settled at their lowest level in six months on Wednesday, diving to $60 a barrel near the close, easing concern about high material costs squeezing profits.

The stock was also helped by a Merrill Lynch report that said Japanese rubber makers have experienced no problems in Thailand, the world's top rubber exporter, easing concerns about the impact of a military coup.

Bridgestone was up 3.5 percent at 2,385 yen.

In the technology sector, electronics parts maker TDK gained 2.1 percent to 9,340 yen.

Shin-Etsu Chemical, the world's largest silicon wafer maker, added 2.4 percent to 7,360 yen after UBS raised its price target to 8,300 yen from 8,000 yen and said Shin-Etsu's $1 billion investment plan announced on Wednesday showed greater than expected expansion in 300-mm wafer volumes.

Among notable stocks, TV Tokyo Corp., Japan's No. 5 TV broadcaster, extends gains to finish the morning up 0.8 percent at 4,040 yen, after a Japanese billionaire activist investor told Reuters he had raised his stake in the company in a bid ''to change the old way of doing business in Japan's broadcasting and mass media industry.

Trade volume slipped with 631 million shares changing hands on the Tokyo Stock Exchange's first section, compared with 704 million shares on Wednesday morning. Decliners slightly outpaced advancers 817 to 724.

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