Nikkei surges to 14-month high on trade boost; chip sector shines

TOKYO, Dec 13 (Reuters) - Japan's Nikkei share average
jumped to a 14-month high on Friday, with semi-conductor-related
shares extending their rally, after sources said Washington and
Beijing had reached a trade deal in principle.
The Nikkei 225 index .N225 surged 2.28% to 23,954.99,
hitting its highest levels since October last year.
The index made a decisive break above a resistance around
23,600. Its next target is seen at 24,448, a 27-year peak marked
on Oct. 2 last year.
The broader Topix .TOPX also gained 1.59% to 1,740.00,
with 86% of shares in the positive territory.
The United States has also agreed to suspend some tariffs on
Chinese goods and reduce others, sources said, in return for
Beijing's pledge to hike purchases of U.S. farm products in
2020. "Markets weren't expecting the U.S. to reduce the existing
tariffs, so if that is true, that would be an additional
surprise," said Hiroyuki Ueno, senior strategist at Sumitomo
Mitsui Trust Asset Management.
Chip-related shares, which have risen in recent weeks on
signs of a bottoming-out of the highly volatile technology
sector, climbed further on the trade news.
Tokyo Electron 8035.T jumped 4.4%, while TDK Corp 6762.T
added 4.1%, Taiyo Yuden 6976.T gained 4.3% and Shin-etsu
Chemical 4503.T advanced 3.9%.
Other sectors that are seen sensitive to U.S-China trade war
such as metal companies and shippers also enjoyed a boost.
Non-ferrous metal sector index .INFRO.T rose 2.7%, with
Sumitomo Metal 5713.T up 3.8%, while shipping companies
.ISHIP.T went up 2.6%.
Insurers and banks also spiked as trade headlines lifted
U.S. long-term bond yields, which would increase their interest
income in the future.
Insurer index .IINSU.T rose 2.4% and banking sector index
.IBNKS.T gained 2.3%.
Tokio Marine 8766.T rose 2.3% to a record high, while
Dai-ichi Life 8750.T gained 3.4%.
The country's top three bank groups — Mitsubishi UFJ
8306.T , Sumitomo Mitsui Financial Group 8316.T and Mizuho
8411.T — rose about 2%.
Chip-making equipment maker NuFlare Technology 6256.T
gained 9.5% after Hoya Corp 7741.T announced a counter-bid for
the firm. Toshiba Corp 6502.T owns 52.4% of NuFlare and has
said it hopes to buy the rest of the company in a corporate
restructuring. Kura Sushi 2695.T dropped 4.5% after the sushi restaurant
chain operator reported a larger-than-expected fall in earnings
in the financial year ended in October and gave a soft guidance
for the current year.