SYDNEY, May 8 (Reuters) - Japanese shares advanced on Friday, in line with Wall Street’s gains, as news of top trade representatives of China and the United States holding a phone talks calmed investors worried about simmering Sino-U.S. tensions, with cyclicals leading the rally.
On the domestic front, hopes for a potential lifting of Japan’s state of emergency in some areas before the nationwide deadline of May 31 also supported investors’ risk appetite, said traders.
The benchmark Nikkei average climbed 2.6% to a one-week closing high of 20,179.09. The index was up 2.9%, rising for a second week, although there were only two trading days this week due to public holidays.
Top U.S. and Chinese trade representatives discussed their Phase 1 deal over the phone on Friday, with China saying they agreed to improve the atmosphere for its implementation and the United States saying both sides expected obligations to be met.
Japan’s economy minister Yasutoshi Nishimura said on Friday that more prefectures were reporting zero coronavirus cases on a daily basis and lifting the state of emergency for those regions before the nationwide deadline was within sight.
Meanwhile, Wall Street’s thee major indexes climbed on Thursday, with the Nasdaq advancing 1.4% to erase losses for 2020. E-mini futures for the S&P 500 index was last quoted 1.4% higher in late Asian trade.
The broader Topix gained 2.2% to 1,458.28, with all but one of the 33 sector sub-indexes on the Tokyo exchange finishing in positive territory.
Highly cyclical iron and steel, non-ferrous metals and sea transport were the top three performing sectors on the main bourse.
Nippon Steel Corp and JFE Holdings Inc jumped 7.1% and 7.5%, respectively, while Nippon Yusen KK rose 3.7%.
Taking a positive cue from Sino-U.S. phone talks and Chinese peers, China-related shares listed on the Tokyo Exchange also outperformed, with Fanuc Corp rising 3.7%, Komatsu Ltd up 2.9% and Hitachi Construction Machinery Co Ltd advancing 3.9%.
Nintendo Co Ltd lost 3.9% as investors took profits after the company’s fourth-quarter profit soared 200% due to surging demand for its Switch games console and popularity of its “Animal Crossing: New Horizons” title.
The Japanese gaming giant forecast a 22.7% fall in its net profit for the current business year through March 2021, which many analysts view as “too conservative.”
Other notable movers include the TSE REIT index, surging 5.2% to its highest closing level since March 13.
Elsewhere, the index of Mothers start-up shares retreated 2.0%, after hitting a near three-month high on Thursday, with biopharma AnGes Inc nosediving 24.7%. (Reporting by Tomo Uetake; editing by Uttaresh.V and Rashmi Aich)