February 25, 2019 / 6:47 AM / 3 months ago

Nikkei closes at 10-week high after Trump delays China tariff hike

* Nikkei ends at highest since Dec 13

* Nintendo tacks on 1 pct after announcing share buyback

By Daniel Leussink and Ayai Tomisawa

TOKYO, Feb 25 (Reuters) - Japan’s Nikkei rallied to a 10-week high on Monday after U.S. President Donald Trump confirmed he would delay a planned tariff increase on Chinese imports following “productive” trade talks over the weekend.

The Nikkei share average rose 0.48 percent to 21,528.23, closing at the highest level since Dec. 13.

Trump had planned to raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports if a deal between the world’s two largest economies was not reached by March 1. He said progress had been made on a host of divisive areas including intellectual property protection, technology transfers, agriculture, services and currency.

“Sentiment is definitely boosted by this news,” said Toru Ibayashi, executive director of wealth management at UBS Securities Japan.

All the same, Ibayashi said further gains will be difficult to achieve once the initial excitement fades, noting the Nikkei is already trading above the psychological resistance level of 21,500.

“Investors are looking for more positive catalysts with Japanese companies’ earnings,” he said. “Since companies expect a decline in profits this year compared to the previous year, the upside is likely to be limited for a while.”

Companies with high exposure to the Chinese market attracted strong demand on Monday, with Keyence Corp surging 4.3 percent, Yaskawa Electric adding 2.7 percent and Komatsu Ltd 0.9 percent higher.

Nintendo Co closed up 1.0 percent after the company said it will buy back up to 1 million of its own shares, or 0.83 percent of shares outstanding, worth up to 33 billion yen ($298.35 million). At one point, the stock was up 4.2 percent on the news.

Envipro Holdings, which recycles metal scrap and industrial wastes, jumped to its daily limit of 675 yen, a 17.4 percent increase, after saying it will launch a recycling business of secondary lithium-ion batteries. It said it will step up efforts to collect rare metals such as nickel and cobalt from used secondary batteries.

The broader Topix rose 0.7 percent to 1,620.87.

All but one of its 33 subsectors rose, led by paper and pulp and electric machinery.

Advancing issues outnumbered declining ones 1,585 to 467.

$1 = 110.6100 yen Editing by Shri Navaratnam and Richard Borsuk

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