Nikkei gains, Fed's new strategy boosts financials

TOKYO, Aug 28 (Reuters) - Japanese shares gained on Friday,
as a jump in U.S. long-term bond yields following the Federal
Reserve's new long-term policy strategy to allow higher
inflation boosted financials and other battered value stocks.
The Nikkei share average .N225 rose 0.36% to 23,290.80 and
was on track for a weekly gain of about 1.6%. The broader Topix
.TOPX climbed 0.85% to 1,629.66, led by a 1.48% gain in Topix
Value .TOPXV . Growth-oriented shares .TOPXG gained just
0.33%.
Life insurers and banks in Japan soared after the Fed put
new weight on bolstering the U.S. labour market and promised to
aim for 2% inflation on average, suggesting periods of too-low
inflation would likely be followed by an effort to lift
inflation "moderately above 2% for some time". The announcement lifted 10-year U.S. bond yields to a
3-1/2-month high of 0.787% US10YT=RR .
Dai-ichi Life 8750.T jumped 6.4%, while T&D Holdings
8795.T gained 5.9%. Among banks, Mizuho 8411.T added 3.3%,
Sumitomo Mitsui Trust 8309.T gained 4.0% and Sumitomo Mitsui
Financial 8316.T climbed 3.3%.
"It is becoming clear that the long-term U.S. bond yields
have bottomed out. So, investors who haven't prepared their
positions for rising yields would want to buy insurers and
financials as hedge," said Takenori Yamamoto, a fund manager at
Norinchukin Zenkyoren Asset.
Among other value shares, railway operators, hit by social
distancing restrictions to contain the COVID-19 pandemic,
gained. Central Japan Railway 9022.T rose 4.4% and East Japan
Railway 9020.T added 4.4%. Real estate firm Mitsui Fudosan
8801.T rose 4.5%.
On the other hand, investors booked profits from tech shares
and other recent strong performers. Chip-making machine maker
Tokyo Electron 8035.T dropped 2.8%, while SoftBank Group
9984.T shed 1.9%. Furniture store chain operator Nitori
9843.T lost 1.9%.
Investors are now waiting for Prime Minister Shinzo Abe's
news conference at 5:00 p.m. (0800 GMT) in which he is expected
to address growing concerns about his health.