Tokyo shares hit 3-month high on speculative short-covering

SYDNEY, May 27 (Reuters) - Japan's stock benchmark Nikkei
rose to a three-month high on Wednesday, with financial stocks
leading gains, as speculative short-covering during afternoon
trade helped the index recoup losses seen earlier in the day.
The Nikkei average .N225 gained 0.7% to 21,419.23, its
highest closing level since February 28.
"Today's rally is largely a short-covering move by macro
hedge funds. It's happening not only in Japan but also in the
U.S. market," said Masanari Takada, cross-assets strategist at
Nomura Securities.
E-Mini futures for the S&P 500 ESc1 were last quoted 0.7%
higher in late Asian trade.
The broader Topix .TOPX added 1% to 1,549.47, its highest
finish since February 27, with all but five of the 33 sector
sub-indexes on the Tokyo exchange closing in positive territory.
Financial stocks notched sharply higher, with securities
.ISECU.T , insurance .IINSU.T and banking .IBNKS.T among
the best-performing sectors on the main bourse.
Dai-ichi Life Holdings 8750.T jumped 6.3%, Nomura Holdings
8604.T advanced 5.7% and Mitsubishi UFJ Financial Group (MUFG)
8306.T climbed 3.6%.
Bucking the overall market, semiconductor-related companies
came under pressure amid rising tensions between the United
States and China, with Tokyo Electron Ltd 8035.T and Advantest
Corp 6857.T shedding 3.6% and 2.7%, respectively.
U.S. President Donald Trump said late on Tuesday he was
preparing to take action against China this week over its plan
to impose national security laws on Hong Kong, but gave no
further details. Transport companies also fell as investors locked in profits
from recent gains, with West Japan Railway Co 9021.T losing
2.8% and ANA Holdings Inc 9202.T declining 2.0%.
Air and land transport companies rallied earlier this week
as investors cheered Japan's decision on Monday to lift the
coronavirus-induced state of emergency nationwide. The turnover of Tokyo's main board was 2.88 trillion yen
($26.8 billion), a one-month high.

($1 = 107.5300 yen)