TOKYO: Japanese shares touched a one-week high on Thursday with sentiment lifted by signs of reduced Sino-US trade tensions, and technology firms got a boost from a rally for US peers.
The benchmark Nikkei share average ended the day up 0.99 per cent at 21,816.19. During the session, it reached 21,871.34, its highest since Dec. 5.
Global equities slumped at the start of this week on continuing concerns over Sino-US trade relations. But investors have slowly stepped back into riskier assets in the past couple of days on hopeful signs of progress in talks between the world's two biggest economies.
Chinese state-owned companies have bought more than 1.5 million tonnes of US soybeans, Reuters reported Wednesday, in the first major US soybean purchases in more than six months – the latest sign of easing tension between the two sides.
It has been a volatile week for the Nikkei, which fell 2.12 per cent on Monday but climbed 2.15 per cent on Wednesday.
"The Nikkei is up, but the market is now awaiting a fresh round of incentives to test further highs," said Takashi Hiroki, chief strategist at Monex Securities. "Sellers are locking in profits, limiting the market's rise."
He also said developments in trade conflicts "can be seen as an opportunity as they provide the market with incentives".
Shares of technology-related companies advanced after the S&P technology sector, which is heavily exposed to China trade, gained overnight.
Panasonic Corp rose 1.5 per cent, Rohm Co gained 2.2 per cent and Canon Inc 1.1 per cent.
Companies that derive a large portion of their sales in China also advanced. Industrial machinery maker Komatsu Ltd added 2.4 per cent, robot manufacturer Fanuc Ltd 1.4 per cent and cosmetics company Shiseido Co advanced 1.1 per cent.
Takeda Pharmaceutical Co surged 7 per cent after a ratings upgrade by Tokai Tokyo Research Institute.
Hitachi slipped 0.5 per cent after the Nikkei business daily reported it was nearing a deal costing between 600 billion to 800 billion yen ($5.29 billion to $7 billion) to buy a power grid business from Swiss engineering group ABB .
Other decliners included entertainment facilities operator Tokyo Dome Corp, which sank 4.3 per cent after reporting net profit fell 17.7 per cent to 6 billion yen ($52.9 million) in the nine months through October.
Of 33 subsectors of the Tokyo Stock Exchange (TSE) 29 gained, led by iron and steel, metal products and sea transport.
The broader Topix ended the day up 0.62 per cent at 1,616.65. ($1 = 113.4500 yen)
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