Nikkei hits near 1-month high as China rebound hopes boost shippers, steelmakers

By Hideyuki Sano
TOKYO, July 6 (Reuters) - Japanese shares rose on Monday as
signs of an economic rebound in China boosted shippers and
steelmakers, while worries over a spike in COVID-19 cases in
some U.S. states were offset by prospects of more policy support
to sustain the recovery.
Japan's Nikkei share average .N225 rose 1.83% to
22,714.44, its highest close since June 10. The broader Topix
.TOPX gained 1.60% to 1,577.15.
Cyclical stocks led the gains as Chinese shares jumped more
than 5% to a five-year high on hopes of a recovery in the
world's second-largest economy. .SS
Shares of securities brokerages .ISECU.T jumped 3.3%,
while shippers .ISHIP.T and steelmakers .ISTEL.T , both
strongly leveraged to demand in China, gained 3.3% and 2.7%
respectively.
Nissan Motor 7201.T gained 5.2% after the carmaker said
its sales in China, the world's biggest auto market, rose last
month. Including those, value-oriented shares .TOPXV outperformed
by rising 1.9%, compared to a 1.3% gain in growth shares
.TOPXG .
Retailers also climbed, with department store operator
J.Front Retailing 3086.T advancing 7.3% and Seven & i Holdings
3382.T adding 2.9%.
SoftBank Group 9984.T rose 2.4% to a 14-month high, helped
by hopes of share buybacks and unwinding of positions by
short-sellers.
Still, trade volume was lacklustre overall, pointing to a
lack of strong conviction among investors on the strength of the
economy hobbled by the COVID-19 pandemic.
The turnover on the Tokyo Stock Exchange's main board was
only 1.801 trillion yen, not far from the lowest level for this
year and about 20% below the average.
A spike in virus cases in some U.S. states is seen as a
threat to the global economic recovery, even though investors
are sticking to hopes that a gradual recovery could continue
with steady policy support.
"The market is looking to see if selective lockdowns
implemented by some states will curtail infections within a week
or two," said Nobuhiko Kuramochi, market economist at Mizuho
Securities.