Nikkei tracks sharp Wall Street gains, supported by dovish Fed remarks

  • Reuters
  • Stock Market News
Nikkei tracks sharp Wall Street gains, supported by dovish Fed remarks
Credit: © Reuters.

* Risk appetite lifted on Fed Chairman's comments

* Nikkei gains 2.8 pct by midday break

* Topix also up 2.8 pct, all of its 33 subsectors rise

By Daniel Leussink

TOKYO, Jan 7 (Reuters) - Japan's Nikkei roared higher on Monday, tracking sharp gains on Wall Street as dovish comments from the Federal Reserve chairman helped ease some of the market's worries about a slowdown in global growth.

The Nikkei share average .N225 ended the morning session 2.82 percent higher at 20,113.37.

The benchmark index rebounded from a sharp 2.3-percent drop on its first trading session this year on Friday.

The broader Topix .TOPX was 2.84 percent higher at 1,512.87, with all of its 33 subsectors trading in positive territory.

On Friday, risk appetite got a huge boost on a strong U.S. jobs report. MKTS/GLOB also got a lift as Fed Chairman Jerome Powell sought to ease market concerns about the risk of a slowdown, saying he would be patient and flexible in policy decisions this year. tone of Powell's remarks was considerably more dovish than (the tone) at the Fed's open markets committee meeting in December," said Hisao Matsuura, chief equity strategist at Nomura Securities.

U.S. and Chinese officials are meeting for trade negotiations starting later Monday, the first face-to-face talks of the year. on Friday, China's central bank announced a new round of policy easing, which frees up around $116 billion for new lending. move helped lift appetite for Japanese firms exposed to China, such as those included in the machinery and electric appliance subsectors on the Topix, said Matsuura.

Shares of industrial machinery maker Komatsu Ltd 6301.T , which has large exposure to China, jumped 6.8 percent, and tractor maker Kubota Corp 6326.T gained 4.9 percent.

Blue chip shares rose across the board, with Toyota Motor Corp 7203.T tacking on 3.3 percent, Sony Corp 6758.T up 3.8 percent, Nintendo 7974.T rising 5.7 percent and Mitsubishi UFJ Financial Group 8306.T adding 1.9 percent.

Takeda Pharmaceutical 4502.T rose 6.1 percent after releasing subscription terms to issue new shares. announcement, which was in line with market expectations, brings the company another step closer to completing its $59 billion takeover of London-listed Shire SHP.L . (Editing by Sam Holmes)

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