Japan's Nikkei closes higher after choppy session amid trade war fears

By Brigid Riley

TOKYO, March 5 (Reuters) - Japan's Nikkei share average nudged higher after volatile trade on Wednesday, 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 closed 0.2% higher at 37,418.24, while the broader Topix .TOPX was up 0.3% at 2,718.21.

The Nikkei briefly gained as much as 0.7% after U.S. President Donald Trump's first address to Congress since his return to the White House.

The market perceived little in the way of fresh bad news, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, although gains narrowed in the afternoon as attention returned to tariff uncertainties.

"Tariffs like those that have already been announced will probably continue to come, so a sense of caution remains," he said.

Ichikawa said that it will likely be difficult to aggressively buy Japanese equities until the United States' tariff policy stance becomes clearer.

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.

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 7203.T ended up 3.5% and Honda Motor 7267.T added 2.1%.

Among other shares, Uniqlo parent firm Fast Retailing 9983.T climbed 1.7% to give the Nikkei the biggest lift, and Fujikura 5803.T, which makes cables for data centres, rallied 7.4% to become the top percentage gainer on the index.

Technology shares were mixed, with chip-testing equipment maker Advantest 6857.T, an Nvidia NVDA.O supplier, erasing gains to finish down 0.3%, while AI-focused startup investor SoftBank Group 9984.T rose 0.8%. Shares of Tokyo Electron 8035.T slid nearly 2%.