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TOKYO: Japan's Nikkei share average rose on Monday as the dollars' rise against the yen supported some exporters after news of easing US-China trade tensions, but weakness in financial stocks kept wider gains limited.
The Nikkei ended 0.3 per cent higher at 23,002.37, after the dollar rose 0.5 per cent to 111.245 yen, hitting a fresh four-month high in Asian trade.
The Nikkei broke the psychologically important level of 23,000 for the first time since early February.
Analysts see the next resistance level at 23,122.45, an intraday low marked on Feb.
2.
However, the broader Topix edged 0.1 per cent lower to 1,813.75, with only 1.29 billion shares changing hands, the lowest volume since early April.
US stock futures gained after Treasury Secretary Steven Mnuchin said on Sunday that the United States and China had agreed put their tariff skirmishing "on hold" to work on a wider trade agreement.
The SP 500 E-mini futures were up 0.6 per cent, the Nasdaq 100 e-minis were 0.7 per cent higher with Dow e-minis also up 0.9 per cent.
"A combination of a dollar-yen level above 111 and higher US stock futures is favourable to Japanese stocks, while sentiment has recovered," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Daiwa Securities research found that companies expect a 2 per cent rise in pre-tax profits for the fiscal year through March 2019, and most of them expect the dollar to trade at 105 yen on average.
A weaker yen boosts the profits Japanese earn abroad when they are repatriated.
TDK Corp rose 2.2 per cent, Daikin Industries was up 1.4 per cent and Nitto Denko gained 2.2 per cent.
Insurers and banks underperformed.
MSAD Insurance fell 4.0 per cent, while Mizuho Financial Group shed 0.8 per cent.
Elsewhere, Japan Tobacco slid 1.3 per cent after the company reported weaker domestic market tobacco sales in the month of April.
