April 4, 2019 / 2:52 AM / 2 months ago

Nikkei edges up to 1-month high as chip stocks rally

* Foreigners net buyers of Japan cash stocks in April for past 18 years - analyst

* Tokyo Electron, Sumco soar on SOX index’s rise

* Japan Display jumps

By Ayai Tomisawa

TOKYO, April 4 (Reuters) - Japan’s Nikkei edged up to a one-month high on Thursday as chip-related stocks gained ground in line with their U.S. counterparts rose overnight, while optimism over U.S-China trade talks continued to support sentiment.

The Nikkei share average rose 0.3 percent to 21,787.60 in midmorning trade, the highest level since March 5.

Chip equipment makers and silicon products makers, which rely heavily on Chinese demand, staged a rally. Tokyo Electron gained 2.7 percent, Advantest Corp soared 3.4 percent and Sumco Corp jumped 5.1 percent.

On Wednesday, the Philadelphia Semiconductor index surged 2.3 percent.

“Investors took heart from strong American shares, but this is also part of a spring rally as the new fiscal year began and new funding is allocated,” said Katsuhiko Nakamura, a director and senior technical analyst at Mizuho Securities.

Nakamura said that foreign investors have been net buyers of Japanese cash stocks in the month of April for the past 18 years, citing data from the Tokyo Stock Exchange.

“Foreigners have been net sellers of Japanese stocks so far this year, but investors are focused on whether there is a turnaround this month,” he said.

Optimism about trade talks has supported investor risk appetite this week. On Wednesday, White House economic adviser Larry Kudlow said trade talks between the United States and China made “good headway” last week in Beijing.

Other cyclical stocks were also in demand, with TDK Corp rising 3.1 percent and Komatsu Ltd adding 2 percent.

Elsewhere, Japan Display Inc jumped 7 percent, extending its gains from the day before after sources told Reuters that the company will begin to supply organic light-emitting diode (OLED) screens for the Apple Watch later this year.

The company is also seeking investment from a group that includes China Silkroad Investment Capital (CSIS), sources have told Reuters. The company has said it is aiming for as much as $990 million in fresh financing.

The broader Topix rose 0.2 percent to 1,625.08. (Editing by Sam Holmes)

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