Japan's Nikkei rallies as Wall Street gains buoy battered sentiment

By Brigid Riley

TOKYO, March 17 (Reuters) - Japan's Nikkei share average rallied amid widespread gains on Monday as investor sentiment got a boost from a sharp rise in U.S. stocks at the end of last week.

The Nikkei .N225 rose 1.1% to 37,475.24 as of the midday break, touching its highest intraday level in more than a week, while the broader Topix .TOPX was up 1.2% at 2,747.62.

Wall Street's gains, as well as news that the U.S. Congress had passed a stopgap spending bill and averted a partial government shutdown, were buoying sentiment and driving the equity market's rise on Monday, said Hiroshi Namioka, chief strategist at T&D Asset Management.

"It may be fleeting, but for now the global risk-off trend has eased up today," he said.

All three major U.S. stock indexes posted solid gains on Friday as investors hunted for bargains at the end of a tumultuous week, with recently battered tech-related megacaps enjoying a strong comeback. .N

Gains were particularly noticeable among Japan's heavyweights on Monday. Tokyo Electron 8035.T, up 2.9%, and Advantest 6857.T, adding 2.2%, were among semiconductor-related stocks to follow their U.S. peers higher, giving the heftiest lift to the overall index.

Heavy machinery makers .IMCHN.T surged, led by an 11% jump in defence-related Mitsubishi Heavy Industries 7011.T as investors continued to speculate about whether Japan may need to beef up its defence spending in the future.

Kawasaki Heavy Industries 7012.T rose 5.2%.

While the risk-off mood was taking a breather, investors had their eyes on a U.S. retail sales report due later in the day amid concerns about the economic growth outlook in the United States.

The U.S. Federal Reserve is expected to stand pat when it meets later this week, along with the Bank of Japan, as the central banks size up global and domestic risks.

Among other major stocks, AI-focused startup investor SoftBank Group 9984.T and game maker Sony Group 6758.T were both up a little more than 2%. Uniqlo parent Fast Retailing 9983.T edged 0.4% higher.