Tokyo stocks rise to 1 week high on hopes of coronavirus slowdown, Wall St rally

SYDNEY, April 7 (Reuters) - Tokyo shares advanced on
Tuesday, supported by tentative signs of the coronavirus
outbreak being contained in New York and other global hot spots,
with long-only investors still awaiting details of Japan's
massive economic stimulus package.
The benchmark Nikkei average .N225 gained 2.0% to
18,950.18, its highest closing since March 31, tracking sharp
gains in Wall Street stocks overnight.
U.S. stocks rallied on Monday, with the S&P 500 .SPX , Dow
Jones Industrial Average .DJI , and Nasdaq Composite .IXIC
all rallying more than 7%, encouraged by the slowing death toll
from the virus in global hot spots, including New York and
Italy. .N
The broader Topix .TOPX rose 2.0% to 1,403.21, also a
highest closing level in a week, with all of the 33 sector
sub-indexes on the exchange finishing in positive territory.
Stocks that were battered more in recent weeks fared better
on Tuesday.
Tokyo Electron Ltd 8035.T climbed 5.7% and Advantest Corp
6857.T soared 12.7% after U.S. Philadelphia semiconductor
index .SOX jumped 10.4% overnight. Samsung Electronics Co
Ltd's 005930.KS better-than-expected profit also provided a
tailwind. However, traders said it is just a short-covering rally and
lacks conviction, with many long-term investors still waiting
for the details of Japan's $1-trillion economic stimulus
package.
Indeed, overall activity was subdued, with the volume of
shares traded on the main board valued at 2.82 trillion yen,
well below its average over the last 20 days of 3.51 trillion
yen.
On the flip side, shares that gained recently were pressured
by profit taking.
Fujifilm Holdings Corp 4901.T , which produces of Avigan
anti-flu drug, a potential COVID-19 treatment, retreated 5.5%
after hitting a record high on Monday.
Drugstore chain operator Welcia Holdings Co Ltd 3141.T and
web/TV conferencing services provider V-cube Inc 3681.T shed
5.2% and 7.2%, respectively.
The Japanese government is planning to finalise a massive
stimulus package worth 108 trillion yen - equal to 20% of
Japan's economic output - to cushion the heavy impact of the
pandemic on the world's third-largest economy. "The proposed large stimulus package is a very positive
step. But markets have already begun to price in the passage of
a 60 trillion yen stimulus, including a fiscal outlay of 20
trillion yen," said Naoya Oshikubo, senior economist at SuMi
TRUST.
"So unless the measures announced are even larger than
forecast, market sentiment will not improve in the short-term --
the yen will not weaken and the stock market will not rally."
Prime Minister Shinzo Abe will hold a news conference at 7
p.m. (1000 GMT).
Abe is also set to announce a state of emergency on Tuesday
for the capital, Tokyo, and six other prefectures to stem a
worrying rise in coronavirus infections in major population
centres.
Elsewhere, Nitori Holdings Co Ltd 9843.T climbed 6.9%
after the discount furniture store operator forecast operating
profit to grow 4.4% in the current business year through
February, even after taking into account the potential impact of
the coronavirus outbreak. Takeda Pharmaceutical Co Ltd 4502.T added 3.9% on the news
that blood products giant CSL Behring has joined forces with the
Japanese drugmaker to develop a COVID-19 plasma treatment.