September 18, 2018 / 7:07 AM / 2 years ago

Nikkei has best gain in 5 weeks, insurers rise and US tariffs shrugged off

* Nikkei posts biggest daily gain in 5 weeks

* Topix posts largest daily gain in 6 months

* Insurers high after U.S. yields soar on Monday

* Electronic suppliers fall after Trump unveils new tariffs products

By Ayai Tomisawa

TOKYO, Sept 18 (Reuters) - Japan's Nikkei rallied on Tuesday to its highest close since Feb. 1, led by insurers thanks to rising U.S. Treasury yields, though electronic suppliers underperformed as traders weighted the impact of new U.S. tariffs on Chinese goods.

Hopes that Prime Minister Shinzo Abe will win a Liberal Democratic Party (LDP) leadership election on Thursday helped push up the Nikkei share average.

The index opened lower but ended 1.4 percent higher - its biggest one-day gain in five weeks - at 23,420.54.

The broader Topix closed at 1,759.88 after climbing 1.8 percent, its biggest daily percentage gain in six months.

Japanese markets were closed for a holiday on Monday.

U.S. President Donald Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports on Monday, but spared smart watches from Apple and Fitbit and other consumer products such as bicycle helmets and baby car seats.

The move was expected, so even though the market opened down, investors seemed to have quickly priced in the news and looked to domestic events.

Abe, who returned to office in December 2012 pledging to bolster defences and reboot the economy, is widely expected to defeat his rival, former defence minister Shigeru Ishiba, for leadership of the LDP.

Expectations of an Abe victory "are raising hopes that Japan's political stability will continue," said Takatoshi Itoshima, a strategist at Pictet Asset Management.

Japanese shares rose broadly, with all of the Topix's 33 subsectors in positive territory.

Insurers who hunt for higher yielding products were among big winners after U.S. Treasury yields soared on Monday on hopes the U.S. central bank could raise interest rates twice more this year. Dai-ichi Life Holdings jumped 4.2 percent and MS&AD Insurance soared 4 percent.

Electronic suppliers underperformed after Apple Inc said Trump's tariff decision could hit a "wide range" of its products.

While Trump will spare Apple's Watch and other consumer gadgets from the latest round of tariffs on Chinese goods, parts for the computer servers and networking gear that power "cloud" data centres and Internet-based services now face a levy, as do some of the parts for the machines used to make semiconductors.

Murata Manufacturing shed 1.4 percent, Alps Electric tumbled 2.1 percent and Kyocera Corp declined 0.9 percent.

Elsewhere Start Today Co was volatile, falling as much as 4.7 percent and rising 0.8 percent before ending 2.4 percent lower at 3,200 yen.

SpaceX, Elon Musk's space transportation company, on Monday named its first private passenger as Yusaku Maezawa, the founder and chief executive of the online fashion retailer. (Editing by Richard Borsuk)

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