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Japanese shares track Wall Street higher as stable U.S. rates boost sentiment

TOKYO, May 21 (Reuters) - Japanese shares gained on Friday, as a strong finish on the Wall Street overnight prompted investors to bet on cheap growth stocks, while stable U.S. interest rates also underpinned sentiment.

The Nikkei share average rose 0.36% to 28,198.37 by 0216 GMT, while the broader Topix edged up 0.15% to 1,898.77.

Nikkei, which has been under pressure on concerns over slow economic recovery from the COVID-19 lows due to Japan’s stagnated vaccine rollouts, briefly fell by 10% from a peak hit in February earlier in the session.

“Investors have started feeing comfortable with making bets as share prices have become relatively cheap,” said Jun Morita, general manager of the research department at Chibagin Asset Management.

“And an overnight gain in the Nasdaq and stable U.S. interest rates also boosted sentiment.”

Fast Retailing, known for its Uniqlo clothing brand, gained 0.77%, while chip making equipment maker Tokyo Electron rose 0.57%. Medical equipment maker Olympus jumped 2.3%.

Wall Street’s main indexes rebounded after a three-day slide, buoyed by gains in technology stocks, while the yield on benchmark 10-year Treasury notes fell after factory activity in the U.S. mid-Atlantic region slowed in May.

CyberAgent, up 3.65%, was the largest percentage gainer in the Nikkei, followed by Recruit Holdings gaining and Toppan Printing, jumping 3.31% and 3.27%, respectively.

Showa Denko, down 3.12 %, was the biggest loser on the index, followed by Inpex, and DOWA Holdings losing 2.96% and 2.66%, respectively.

There were 106 advancers on the Nikkei index against 118 decliners.

Reporting by Junko Fujita; Editing by Rashmi Aich

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