(Corrects to fix typo in para 7 to UFJ, not UGJ)
TOKYO, Nov 6 (Reuters) - Japan’s benchmark Nikkei share average inched up to a fresh 13-month high on Wednesday as hopes for a U.S.-China trade deal, a weaker yen and rising bond yields buoyed exporters and financials.
The Nikkei average ended up 0.1% at 23,303.82 points, its highest close since Oct. 10 last year.
The broader Topix ended marginally higher at 1,694.45, its strongest close in more than a year, after giving up earlier gains as profit taking kicked in.
Overnight, the U.S. 10-year Treasury yield climbed as high as its six-week peak of 1.873% and Germany’s 20-year yield rose into positive territory for the first time in 3-1/2 months on optimism that the United States and China will scale back a bruising trade war.
On Wednesday, the dollar held the upper hand against its rivals, particularly versus safe-haven yen, with the pair last trading at 109.06 yen, not far from its October high, providing a boost for Japanese exporters as a weak yen enhances corporate profits when they are repatriated.
Export-oriented Hitachi advanced 2.1%, Mitsubishi Motor rose 1.5% and Kyocera gained 1.4%.
The interest rate-sensitive financial sector also outperformed, with T&D Holdings jumping 4.2%, Dai-ichi Life Holdings and Mitsubishi UFJ Financial Group also adding 1.7% and 0.9%, respectively.
“Hot money players, such as commodity trading advisors (CTA) and some macro hedge funds, have been building long positions in U.S. and Japanese stocks,” said Masanari Takada, cross-asset strategist at Nomura Securities.
“Those players seem to be betting on further upside ahead of a potential trade agreement between the United States and China.”
Mid-year earnings season continued in full gear in Japan.
Suzuki Motor shed 3.6% after the automaker’s quarterly profit plunged by almost a third on slumping car demand in India, its biggest market. It also slashed its full-year vehicle sales outlook.
Asahi Group Holdings dived 6.1% after the brewer lowered its forecast for full-year operating profit and year-end dividend, citing unfavourable weather and currency moves.
Kyushu Railway soared 3.7% after it announced its first ever share buyback of up to 10 billion yen, after receiving proposals from New York-based investment firm, Fir Tree Partners. (Reporting By Tomo Uetake; Editing by Kim Coghill)