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Japan's Nikkei edged higher on Tuesday morning helped by gains in chip equipment makers, but the gains were limited as US-Japan trade talks scheduled this week kept investors cautious.
Investors returned to the market after a national holiday on Monday. The dollar's move above ¥112 level has underpinned the confidence among Japan's export-exposed firms.
Tuesday's gainers included large cap stocks such as Tokyo Electron and Advantest Corp, which soared 3.0 per cent and 3.4 per cent, respectively, tracking steady US tech shares overnight.
The Nikkei share average gained 0.1 per cent to 23,901.40 after dipping in negative territory. The benchmark index has hit a more than eight-month high after rising US yields pushed up financial stocks, while the weak yen supported the overall sentiment.
The next milestone is the 24,129.34 level hit on January 23, a break of which would put the index at its highest since November 1991.
US-Japan trade talks
Japan and the United States postponed their second round of trade talks in New York to Tuesday from Monday, a Japanese official said, amid concerns in Tokyo that it would face greater pressure to reduce the bilateral trade imbalance.
US Trade Representative Robert Lighthizer and Economy Minister Toshimitsu Motegi were scheduled to meet on Monday evening, ahead of a Wednesday summit between US President Donald Trump and Japanese Prime Minister Shinzo Abe, on the sidelines of a UN General Assembly meeting.
“The market wants to see the outcome of the trade talks and the summit this week before chasing the market further,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities, adding that the market is jittery as a new round of US-China tariffs triggered profit-taking in machinery companies which rely on China demand.
Keeping broader sentiment cautious, China and the United States imposed a new round of tariffs on each other's goods on Monday, which is expected to hit global growth.
Construction equipment makers Komatsu Ltd shed 2.0 per cent and Hitachi Construction Machinery declined 2.7 per cent, as investors took profits from 13 per cent gains in their shares over the past week. Electrical equipment maker Yaskawa Electric tumbled 5.9 per cent after jumping 13 per cent last week.
Mazda Motor dropped more than 2 per cent after the automaker had said on Friday that it has suffered ¥28 billion impact from a loss of production due to western Japan rains in July. The broader Topix gained 0.6 per cent to 1,814.72.
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