Japanese shares jump 1.5% as China rebound hopes boost shippers, steelmakers

TOKYO, July 6 (Reuters) - Japanese shares rose on Monday as signs of an economic rebound in China boosted shippers and steelmakers, while investor concerns about a spike in U.S. COVID-19 cases were offset by prospects of policy support to sustain the recovery.

Japan’s Nikkei share average rose 1.52% to 22,640.46, hitting its highest levels in nearly two weeks.

The broader Topix gained 1.32% to 1,572.21.

The sectors that have been hit by the pandemic and are perceived to be the most sensitive to demand in China topped the list of best performers as Chinese shares soared to five-year highs on hopes of a recovery in the world’s second-largest economy.

Most markets had gained ground last week as a raft of economic data from June beat expectations.

Shippers jumped as much as 3.4%, while airline companies gained 2.4%, partly on hopes that countries could start allowing international travels, given that the pandemic is relatively contained in some Asia Pacific countries.

Steelmakers also gained 2.1%.

Retailers also gained, with department store operator J.Front Retailing advancing 6.1% and Seven&i up 2.3%.

Nissan Motor gained 4.4% after the carmaker posted brisk sales in China, the world’s biggest auto market, last month.

Softbank Group rose 2.2% to a 14-month high, helped by hopes of share buybacks and short-sellers’ position unwinding.

GungHo extended its solid bull run since last week, rising 4.4% to hit a near-seven-month high on hopes of increased demand for a new game.

While rising virus cases in the United States are seen as a threat to the global economic recovery, investors are sticking to hopes that a gradual economic recovery could continue with steady policy support.

Reporting by Hideyuki Sano, Editing by Sherry Jacob-Phillips