Japan's Nikkei share average rose for the first time this week on Friday as investors took heart from reports that the United States and the European Union may agree to suspend auto tariffs, triggering short-covering on cyclical shares like automakers.

Drugmaker Eisai Co was in the spotlight, jumping 19 per cent after it and Biogen Inc said that the final analysis of a mid-stage trial of their Alzheimer's drug showed positive results for patients who received the highest dose.

The Nikkei rose 0.8 per cent to 21,720.41 in midmorning trade, snapping a four-day losing streak. The index has dropped 2.9 per cent for the week so far, heading for a third straight weekly decline.

German Chancellor Angela Merkel said she would back lowering EU tariffs on imports of US car. An industry source told Reuters that the US ambassador to Germany had mentioned to German auto executives that U.S. President Donald Trump may abandon his threatened tariffs on European cars if in return the European Union scrapped duties on US-made autos.

“The market seems to have priced in this news related to trade war issues for now,” said Hikaru Sato, a senior technical analyst at Daiwa Securities. “But trade war worries are not over of course. The market continues to be alert depending on what headlines they see.”

The market remained cautious ahead of Washington's implementation of its threatened tariffs on Chinese goods and the US jobs report due later in the day.

The United States is due to begin collecting tariffs on $34 billion in Chinese goods at 0401 GMT on Friday. Focus has shifted to how China will retaliate and the potential volatility that could cause in global financial markets.

Friday's gainers included automakers, with Toyota Motor Corp rising 1.6 per cent, Subaru Corp up 2.1 per cent and Honda Motor Co adding 1.9 per cent. Other exporters followed suit. Advantest Corp surged 2.5 per cent and TDK Corp soared 2.9 per cent. The broader Topix rose 0.6 per cent to 1,685.66.

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