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Japan stocks flat ahead of U.S. tariffs decision, chip firms soar

Published 12-12-2019, 12:53 pm
Updated 12-12-2019, 12:55 pm
© Reuters.  Japan stocks flat ahead of U.S. tariffs decision, chip firms soar

TOKYO, Dec 12 (Reuters) - Japanese shares were mostly flat on Thursday ahead of a deadline on a new round of U.S. tariffs on Chinese imports due this weekend while semiconductor firms tracked gains in their counterparts on Wall Street.

The Nikkei share average .N225 ended 0.14% higher at 23,424.81. The benchmark index has been in a holding pattern since early November, hovering below 23,600 — increasingly seen as a major resistance.

The broader Topix .TOPX shed 0.12% to 1,712.83, dented by a fall of 0.5% in small-cap shares .TOPXS .

U.S. President Donald Trump is expected to meet with top trade advisers on Thursday to discuss the planned Dec. 15 tariffs on some $160 billion in Chinese goods, three sources familiar with the plans said. the market has been underpinned by some hopes of a Sino-U.S. trade deal, investors worry that negotiations could fall apart if the tariffs kick in this weekend.

"It will be a huge shock for the market if the tariffs are introduced," said Shingo Ide, chief strategist at NLI Research Institute.

"Exporters shares have already risen considerably this quarter on expectations that their earnings will grow in double digits (percent) next financial year," he added.

The market received some support earlier in the session from the U.S. Federal Reserve's relatively dovish stance. The central bank held interest rates steady and signalled borrowing costs would not change anytime soon. shares were the brightest spot following their peers' strong showing on Wall Street. The Philadelphia semiconductor index .SOX rose 2.2% to a record high on Wednesday.

The top three gainers on the Nikkei were all chip-related shares. Tokyo Electron 8035.T rose 4.9%, Sumco 3436.T gained 3.3% and Advantest 6857.T added 2.8%.

Other strong gainers in the sector included Disco 6146.T and Shin-etsu Chemical 4063.T , which rose 4.7% and 1.8%, respectively.

Machinery makers .IMCHN.T gained 0.5% despite weak reading on Japan's machinery orders data.

Hitachi Construction 6305.T rose 0.2% and hit a one-year high.

Core machinery orders fell 6% in October, the fourth consecutive month of decline, way below expectations of a small gain, raising concerns capital spending may be losing momentum. Kagu 8186.T jumped 30.9% after a media report said electronic appliance retailer Yamada Denki 9831.T will pay 4 billion yen to take over the troubled furniture store chain operator as a subsidiary. Denki fell 1.6%.

Jasdaq index of start-up firms .NOTC dipped 0.1% after 14 consecutive winning sessions.

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