Japan's Nikkei bounces as US tariff pause eases market concerns

Updates for midday market close

By Brigid Riley

TOKYO, Feb 4 (Reuters) - Japan's Nikkei share average rebounded on Tuesday as concerns around U.S. tariffs eased after President Donald Trump suspended his threat of steep tariffs on Mexico and Canada, helping battered automakers recover.

The Nikkei .N225 gained 1.6% to 39,140.41 as of the midday break as investors bought back shares after the benchmark index logged its worst session in four months on Monday. The broader Topix .TOPX added 1.4% to sit at 2,757.47.

Trump agreed to a 30-day pause before engaging in further negotiations with neighbouring Canada and Mexico, alleviating immediate fears that rattled global markets on Monday.

Among stocks rallying on Tuesday were Japanese automakers, which took a hit in the last session as investors weighed how tariffs on Mexico might impact auto production. Several automakers have factories in Mexico.

The auto sub-index .ITEQP.T rebounded, climbing 2.3% to be one of the top performers among the Tokyo Stock Exchange's 33 industry groups.

However, uncertainties over the implications of the tariffs going forward remained.

Kazuo Kamitani, an equities strategist at Nomura Securities, noted that while Toyota 7203.T recovered some degree of Monday's losses in early trade, major Japanese automakers didn't rise as much as expected.

"Considering that we're still looking at a trade war in one month, it might be difficult for Toyota to see a more significant bounce back," he said.

Toyota Motor was last up 2.9%.

Along with lingering questions about U.S. tariffs on Canada and Mexico, trade barriers on China are still due to take effect within hours.

Among individual stocks, domestic company revenue reports created some of the biggest percentage winners and losers on the Nikkei.

Ceramics maker Kyocera 6971.T soared 9% and Murata Manufacturing 6981.T jumped 5.8%. Mitsubishi Motors 7211.T slid 13.1% to the bottom of the pack.

Of the Nikkei's 225 constituents, 189 rose and 35 declined. One share was untraded.