March 9, 2018 / 3:22 AM / 10 months ago

Nikkei hits more than 1-week high on easing North Korea tensions

* Nikkei has gained 1.8 percent for the week

* Defense-related stocks tumble

By Ayai Tomisawa

TOKYO, March 9 (Reuters) - Japanese stocks rose to a more than one-week high on Friday, tracking broader gains across Asian equities, as tensions over North Korea eased after U.S. President Donald Trump agreed to a meeting with Kim Jong Un that could come before May.

The news lifted risk sentiment, pushing most sectors into positive territory, but defense-related stocks, which had risen when North Korea fired missiles last year, lost ground.

Asian markets were also underpinned by Trump's softer-than-expected stance on trade tariffs, easing trade war fears that have kept the market on edge for a week.

Trump pressed ahead on Thursday with import tariffs of 25 percent on steel and 10 percent for aluminium, but backtracked from an earlier "no-exceptions" stance and exempted Canada and Mexico and offered the possibility of excluding other allies.

The Nikkei rose as much as 2.4 percent to 21,884.45 in midmorning trade, the highest since March 1, before trimming gains to end the morning market up 0.9 percent at 21,554.67.

The benchmark index has risen 1.8 percent so far this week.

"The Japanese market's sentiment was relatively vulnerable when North Korea launched missiles last year compared to asset classes in other regions, so the news that the two leaders will be meeting is very positive, at least for the short-term," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

"But how much we can expect from the meeting is still up in the air ... North Korea had a hard line stance on its nuclear program. The market is still not fully convinced that discussion will go smoothly..."

Friday's winners included such large cap stocks as Fast Retailing, rising 1.5 percent, SoftBank, up 1.6 percent, and Daikin Industries, up 2.3 percent.

Insurers were also bought, with T&D Holdings up 1.6 percent and Sompo Holdings rising 2.3 percent.

On the other hand, defense equipment maker Ishikawa Seisakusho tumbled 11 percent, firearm maker Howa Machinery sank 11 percent and health protection devices maker Shigematsu Works fell 8.8 percent.

The broader Topix rose 0.6 percent to 1,719.97. (Editing by Himani Sarkar)

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