TOKYO, June 21 (Reuters) - Japan’s Nikkei share average rose on Thursday as concerns over China-U.S. trade issues that hit markets early this week appeared to recede, while technology stocks rallied on the back of Nasdaq’s strong performance.
The market was also supported by expectations that dividend payouts would be reinvested as many Japanese firms pay their investors in late June. Total dividend payments in the last two weeks of June were estimated at 4.5 trillion yen ($40.7 billion).
The Nikkei index rose 0.61 percent to 22,693.04.
“The market has calmed down a little bit as most investors think that trade tension would not escalate further from there...U.S. and China would be both hurt if they keep going like that,” said Toru Ibayashi, executive director of Wealth Management at UBS Securities.
But the broader Topix fell 0.12 percent to 1,750.63, failing to sustain earlier gains of up to 0.34 percent.
As the Topix significantly underperformed, the ratio of the two indexes, NT ratio, jumped to 12.96, its highest level since 1999.
Dragging down the Topix were bank shares, which dropped 2.3 percent and were the second-worst sectoral performer on Thursday. They have shed more than 15 percent since the beginning of the year as the Bank of Japan’s negative interest rate policy has undermined their income.
Moreover, the sector was hurt by a report in the Nikkei newspaper that big Japanese banks’ cash advances to card holders at annual interest rates of 2-14 percent are piling up irrecoverable debt.
The Nikkei said that bad debt tied to such cash advances climbed 13 percent to a six-year high of roughly 140 billion yen ($1.27 billion) in fiscal 2017.
Sumitomo Mitsui Financial Group dropped 2.4 percent, Mitsubishi UFJ Financial Group fell 2.2 percent and Mizuho Financial Group shed 1.2 percent.
Some tech shares gained ground. Softbank rose 4.6 percent while Taiyo Yuden gained 4.3 percent. TDK Corp climbed 3.3 percent.
$1 = 110.71 yen Editing by Jacqueline Wong