Nikkei rebounds sharply as North Korea fears ease

  • Reuters
  • Stock Market News
Nikkei rebounds sharply as North Korea fears ease
Credit: © Reuters.

* Companies expect 10.5 pct rise in FY net profit - broker

* Financials, tech shares outperform

By Ayai Tomisawa

TOKYO, Aug 15 (Reuters) - Japanese stocks rebounded sharply on Tuesday morning and moved away from a three-month low hit on the previous day after Wall Street rallied as tensions between the United States and North Korea eased.

The Nikkei share average .N225 jumped 1.4 percent to 19,817.30 in midmorning trade, after falling 1.0 percent on the previous day to hit the lowest closing level since May 2.

U.S. officials on Sunday played down the risk of an imminent war with North Korea. Those concerns had helped wipe out nearly $1 trillion from global equity markets last week. about a conflict between the United States and North Korea are not completely gone, but the market seems to be settled now," said Masashi Oda, general manager at the strategic investment department at Sumitomo Mitsui Trust Asset Management.

He said the Nikkei will likely rise above 20,000 on the back of positive catalysts including brisk first-quarter earnings and full-year projections from Japanese companies as well as strong growth domestic product data. to Rakuten Securities, Japanese companies now expect a 10.5 percent rise in their net profits for this fiscal year through March, compared to a 5.9 percent increase forecast in May.

Financial stocks, which underperformed on Monday, gained ground. Dai-ichi Life Holdings 8750.T rose 2.1 percent, while T&D Holdings 8795.T and Mitsubishi UFJ Financial Group 8306.T rose 2.3 percent each.

Tracking strength in U.S. technology shares, Japanese chip-related companies such as Advantest Corp 6857.T and Tokyo Electron 8035.T gained 2.1 percent each.

Automakers were also in demand, with Toyota Motor Corp 7203.T rising 1.8 percent, Nissan Motor Co 7201.T adding 2.0 percent and Subaru Corp 7270.T climbing 1.6 percent.

The value of the yen, which is a big driver of the market given the high number of exporter stocks, also underpinned trading.

The dollar rose 0.5 percent to 110.18 yen JPY= , pulling further away from a near four-month low of 108.72 yen set on Friday.

The broader Topix .TOPX gained 1.3 percent to 1,620.33. (Editing by Shri Navaratnam)

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