Japan's Nikkei edges higher in choppy trade as trade war concerns weigh

By Brigid Riley

TOKYO, March 5 (Reuters) - Japan's Nikkei share average nudged higher in volatile trading on Wednesday, supported by a rebound in technology giants, even as concerns over a potential trade war following U.S. tariffs and its impact on the global economy stifled risk appetite.

The Nikkei .N225 edged 0.1% higher to 37,356.44 by the midday break, while the broader Topix .TOPX was flat at 2,709.86.

U.S. stocks ended lower on Tuesday, with the Nasdaq veering near correction territory, as trade tensions escalated following U.S. President Donald Trump's new levies on Canada, Mexico and China. .N

Market players were still holding out hope that tariff pains might be mitigated after U.S. Commerce Secretary Howard Lutnick told Fox Business that Trump will reach a middle ground with Canada and Mexico on tariffs. The news helped limit selling of Japanese equities.

Amid the selloff on Wall Street overnight, U.S. chip giant Nvidia NVDA.O and other major technology companies rebounded modestly, offering some support for their Japanese peers.

Chip-testing equipment maker Advantest 6857.T, an Nvidia supplier, climbed nearly 2% on Wednesday, and AI-focused startup investor SoftBank Group 9984.T rose 0.6% to lift the overall Nikkei. Shares of Tokyo Electron 8035.T slid 0.3%.

Automakers made a strong comeback as the yen weakened slightly after reaching a three-month high against the dollar in the previous session. Toyota Motor led the gains, rising 2.9% earlier in the day.

Still, the uncertainty over the outlook for tariffs and their impact on the U.S. and global economy are "exacerbating investors' anxieties and risk perception," said Nomura Securities strategist Maki Sawada.

"In this environment, it's difficult for buying to increase significantly," she said.

Trump's first address to Congress since his return to the White House and remarks by Bank of Japan Deputy Governor Shinichi Uchida also kept investors on guard.

Among other Nikkei heavyweights, Uniqlo parent firm Fast Retailing 9983.T climbed 1.3%, while video game developer Konami Group 9766.T slumped 3.5% and robot maker Fanuc 6954.T gave up 1.5%.