Nikkei rises to 1-1/2-week high on Wall Street rally

Japan's Nikkei share average rose to a 1-1/2-week high on Tuesday, thanks to a solid Wall Street performance, while Yahoo Japan surged on news that SoftBank Group would buy roughly $2 billion worth of its shares through a subsidiary.

The Nikkei was up 1.1 per cent at 22,294.40 after hitting a high of 22,316.27, its strongest since June 29. Equities were boosted after the Dow and the S&P 500 posted their biggest gains in over a month overnight, with focus steadily turning away from US-China trade angst that buffeted financial markets last week.

“Other markets are leaning towards 'risk on' and this is supportive for Japanese shares. There are also expectations that trade frictions won't worsen,” said Chihiro Ohta, equity general manager at SMBC Nikko Securities, tipping the Nikkei to stretch its recent highs.

Yahoo Japan Corp was up 10 per cent after rising as much as 11.66 per cent as SoftBank Group Corp said on Tuesday that its unit, SoftBank Corp, would buy ¥221 billion ($1.99 billion) worth of shares in the company, a 10.78 per cent stake, held by US investment firm Altaba Inc.

Bank shares gained, tracking a rally in their US peers. Mitsubishi UFJ Financial Group rose 3.0 per cent, Mizuho Financial Group advanced 1.5 per cent and Sumitomo Mitsui Financial Group added 2.4 per cent.

Exporters such as high-techs and automakers were buoyed by the yen's retreat to a one-week low against the dollar, with Tokyo Electron gaining 1.5 per cent and Advantest Corp up 1.49 per cent.

Honda Motor Co rose 1.6 per cent and Mazda Motor Corp climbed 1 per cent. Nissan Motor Co gained 2.9 per cent, despite the automaker's admission on Monday that it had improperly measured exhaust emissions and fuel economy for 19 vehicle models sold in Japan.

The broader Topix advanced 1 per cent to 1,729.01.