February 25, 2019 / 2:46 AM / 3 months ago

Nikkei rises to 10-week high after Trump delays tariff hike on China goods

* Nikkei reaches highest since Dec. 14

* Nintendo soars after announcing share buyback

By Ayai Tomisawa

TOKYO, Feb 25 (Reuters) - Japan's Nikkei rallied to a 10-week high on Monday morning after U.S. President Donald Trump confirmed he would delay a planned tariff increase on Chinese imports following "productive" trade talks over the weekend.

The Nikkei share average rose 0.8 percent to 21,590.03, the highest level since Dec. 14.

Trump had planned to raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports into the United States if a deal between the world's two largest economies were not reached by Friday. He said in a tweet that progress had been made on a host of divisive areas including intellectual property protection, technology transfers, agriculture, services and currency.

"Sentiment is definitely boosted by this news," said Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan.

All the same, Ibayashi believes further gains will be difficult to achieve once the initial excitement fades off, noting the Nikkei is already trading above the psychological resistance level of 21,500.

"Investors are looking for more positive catalysts with Japanese companies' earnings," he said. "Since companies expect a decline in profits this year compared to the previous year, the upside is likely to be limited for a while."

Companies with high exposure to the Chinese market attracted strong demand, with Keyence Corp jumping 3.7 percent, Yaskawa Electric up 2.4 percent and Komatsu Ltd gaining 1.7 percent.

Nintendo Co rallied as much as 4.2 percent after the company said it will buy back up to 1 million of its own shares, or 0.83 percent of shares outstanding, worth up to 33 billion yen.

Envipro Holdings, which recycles metal scrap and industrial wastes, jumped 17 percent to a daily limit-high of 675 yen after it said in its earnings documents that it will launch a recycling business of secondary lithium-ion batteries. It said it will step up efforts to collect rare metals such as nickel and cobalt from used secondary batteries.

The broader Topix gained 0.7 percent to 1,621.31.

Advancing issues outnumbered declining ones 1,478 to 559. (Editing by Shri Navaratnam)

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