China's U.S. imports tariff cuts propel Japan shares to best day in 13 months

* China says to halve some tariffs on U.S. imports
* Nikkei leaps 2.4%, Topix up 2.1%
* Trade turnover tops 3 trln yen, highest in 2 months
* Earnings season in full swing in Japan

By Tomo Uetake
TOKYO, Feb 6 (Reuters) - Japanese shares posted their
biggest one-day gain in more than a year on Thursday as investor
sentiment was buoyed after China cut tariffs on some imported
goods from the United States, lifting some of the gloom from a
fast-spreading virus outbreak.
The benchmark Nikkei average .N225 jumped 2.4%, its most
since late December 2018, to a two-week closing high of
23,873.59.
The broader Topix .TOPX advanced 2.1% to 1,736.98, also
marking its best day in 13 months. Turnover on the main board
hit 3.05 trillion yen ($27.7 billion), the highest since Dec.
13.
"Although buying in index futures was the main driver of
today's market, more than 3 trillion yen worth of turnover (in
cash equities) implies some real buying was also happening,"
said Takeo Kamai, head of executions services at CLSA in Tokyo.
"The key here is whether we can clear the iron ceilings --
24,000 in the Nikkei and 110 yen in the dollar/yen. If we break
above those levels, we are likely to see more full-fledged
buying from investors."
All of the 33 sector subindexes on the Tokyo Stock Exchange
were in positive territory, led by cyclical sectors. Insurance
.IINSU.T , oil and coal products .IPETE.T and precision
machinery .IPAPR.T were the top three performing subindexes.
Stocks extended earlier gains after China said it will halve
tariffs on some U.S. goods from Feb. 14, corresponding with U.S.
pledges to cut levies on some Chinese goods after the two sides
reached a partial trade deal early last month. The announcement was seen by analysts as a move by Beijing
to boost confidence amid the coronavirus outbreak that has
disrupted much of its economy and is increasingly rippling
through global supply chains.
"Under the phase 1 deal, China has to meet a tough target to
increase U.S. imports by $100 billion this year, so a measure
like this was necessary and expected," said Tomo-o Kinoshita,
global market strategist at Invesco Asset Management.
"But at the same time, that they did this now points to
their desire to support Chinese companies as the coronavirus
epidemic will obviously deal a huge blow to China's growth."
China said it hopes to work with the United States to
eliminate all tariff increases in future.
Overnight, the S&P 500 .SPX climbed 1.1% to a record close
and the Nasdaq Composite .IXIC added 0.4% to an all-time peak,
while the Dow .DJI advanced 1.7%, following an upbeat ADP
private sector jobs report and ISM's non-manufacturing index.
.N The greenback hit a two-week high of 109.985 yen JPY=EBS ,
providing a tailwind for Japanese exporters, as a weaker local
currency boosts corporate profits when they are repatriated.
With the earnings season in full swing in Japan, Toyota
Motor Corp 7203.T rose 2.6% after the country's biggest
automaker raised its forecast for annual operating profit by
4.2%, citing favourable currency rates and better-than-expected
vehicle sales. Pan Pacific International Holdings Corp 7532.T soared
17.7% after the discounter Don Quijote's parent raised its
operating profit forecast for the year ending June. Holdings Corp 4689.T surged 6.0% after the internet
services firm reported a net profit of 75.1 billion yen for the
April-December period, up 7% from a year earlier, due to its
consolidated subsidiary of ZoZo. Bucking the overall firmness, DeNA Co Ltd 2432.T dived
9.7% after the mobile partner of Nintendo booked a 49.4 billion
yen writedown as its gaming business falters in Japan's
saturated mobile market. Although the financial markets found some comfort, traders
admitted concerns about the coronavirus outbreak and its broader
impact on individual companies and the economy.
The death toll in mainland China jumped by 73 to 563 as
experts intensified efforts to find a vaccine for the disease
that has shut down Chinese cities and forced thousands more into
quarantine around the world. Drugmakers and the World Health Organization played down
reports about progress towards finding treatments, which had
boosted traders' confidence. = 109.9400 yen)