SYDNEY, July 3 (Reuters) - Japanese stocks ended higher on Friday as strong U.S. jobs data provided assurance that recovery in the world’s largest economy was well under way, though investors remained cautious as Tokyo reported a spike in COVID-19 cases.
The benchmark Nikkei average rose 0.7% to close at 22,306.48, taking a positive cue from a record surge in U.S. June payrolls and Wall Street’s overnight rally. But for the week, it was down 0.9%.
Japan’s capital city of Tokyo confirmed more than 100 COVID-19 cases, its highest daily tally in two months, for two days in a row on Friday.
Although chief cabinet secretary said there was no need to reintroduce a state of emergency, traders said fund managers were adjusting portfolios for a possible redeployment of coronavirus-induced restrictions.
Potential beneficiaries of lockdowns or other restrictions led the gains, with gaming company Nintendo advancing 3.6% and medical data platform M3 jumping 4.5%.
Meanwhile, travel-related ANA Holdings <9202.%> and Kyushu Railway lost 1.3% and 1.5%, respectively, while Tokyo Disney Resort operator Oriental Land dropped 1.5%.
The broader Topix added 0.6% to 1,552.33, with one-third of the 33 sector sub-indexes on the Tokyo exchange finishing lower, however.
Electric power companies came under pressure on media reports that Japan was looking to suspend or close up to 100 older, inefficient coal-fired power plants by around 2030. Tokyo Electric Power and Shikoku Electric Power fell 1.5% and 1.4%, respectively.
The index of Mothers start-up market rebounded 3.1%, partially clawing back from a 5.0% slide on Thursday.
Japan Exchange Group’s data showed foreigners have sold Japanese stocks for a third straight week.
BlackRock Investment Institute upgraded Japanese equities to neutral from underweight earlier this week.
“The combination of domestic policy support, a relatively benign virus experience, and gearing into the global economic recovery can translate into performance,” said Ben Powell, chief Asia investment strategist.
Reporting by Tomo Uetake; Editing by Sherry Jacob-Phillips and Rashmi Aich