Japan's Nikkei gains despite US tariff threats; banks rally on upbeat GDP

By Brigid Riley

TOKYO, Feb 17 (Reuters) - Japan's Nikkei share average gained in choppy trade on Monday, boosted by financials as the economy grew more than expected, while automakers dragged on threats of U.S. tariffs aimed at imported cars.

The Nikkei .N225 added 0.1% to close at 39,174.25 after seesawing between gains and losses for much of the session. The broader Topix .TOPX climbed 0.3% to 2,766.9.

Rate-sensitive banks .IBNKS.T gained 0.9% and shorter-term Japanese government bond yields marched higher after data showed Japan's economy expanded an annualised 2.8% in the October-December quarter.

The latest Gross Domestic Product (GDP) figures appeared to support the Bank of Japan's plan to keep hiking interest rates and normalise monetary policy.

Megabanks Sumitomo Mitsui Financial Group 8316.T and Mitsubishi UFJ Financial Group 8306.T both added about 2%.

Investors sized up the latest tariff salvo after U.S. President Donald Trump said on Friday that tariffs on automobiles would be coming as soon as April 2, without any further details.

"There are a lot of uncertainties..., leaving just a vague impression that tariffs will be increased," said Kazuo Kamitani, an equities strategist at Nomura Securities.

Toyota Motor 7203.T, down 1.1%, was among major automakers to decline. The auto sector .ITEQP.T shed 1.3% to become one of the worst performers among the Tokyo Stock Exchange's 33 industry sectors.

Wall Street offered Japanese shares little direction, with U.S. stocks ending mixed on Friday. AI darling Nvidia NVDA.O climbed to lift the Nasdaq, while the Dow and S&P 500 declined..N

U.S. markets will be closed on Monday for the Presidents' Day holiday.

Among Japan's heavyweight shares, chip-testing equipment maker Advantest 6857.T, which counts Nvidia among its customers, gained 1.3%, while AI-focused startup investor SoftBank 9984.T added 1.8% to boost the Nikkei the most.

Peer Tokyo Electron 8035.T stumbled 1.1%, while Sony Group 6758.T rallied 4.1%.

Bridgestone 5108.T surged to end nearly 6% higher as the tiremaker announced plans to buy back up to 11% of its shares.