Japan's Nikkei climbs on upbeat US trade talks, TSMC earnings beat

By Kevin Buckland

TOKYO, April 17 (Reuters) - Japan's Nikkei share average bounced back on Thursday from the previous session's declines, helped by a weaker yen after the first round of closely watched trade negotiations between Tokyo and Washington were lauded by President Donald Trump.

The equity benchmark also staged a late, tech-led push higher in the final hour after Taiwanese chip major TSMC 2330.TW posted first-quarter profit that topped analyst estimates.

The Nikkei .N225 ended the day up 1.35% at 34,377.60, just off the session's high, as it took back the ground it lost in Wednesday's 1% slide.

The broader Topix .TOPX added 1.29%.

Japan's chief negotiator, economy minister Ryosei Akazawa, met U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson on Wednesday, with President Donald Trump also making a surprise appearance.

Speaking to reporters after the discussions, which Trump had lauded on social media as making "big progress", Akazawa said Washington wants a deal with Tokyo as a "top priority."

He also revealed that currencies had not figured in the first round of negotiations, spurring a rebound in the dollar-yen exchange rate after it had earlier slipped to the lowest since September.

A weaker yen generally provides a tailwind for Japanese equities because it increases the value of exporters' overseas revenues.

Last month, Trump had accused Tokyo of pursuing a policy to devalue the yen, giving Japan an unfair trade advantage.

Mazda Motor 7261.T and Subaru 7270.T, which are heavily reliant on the U.S. market, jumped 2.72% and 1.84%, respectively. Toyota 7203.T, by contrast, shed earlier modest gains to end flat.

Elsewhere, stocks that suffered selling on Wednesday were bought back, including chip-sector shares, which got an additional lift from TSMC's strong financial results.

Chip-testing equipment maker and Nvidia supplier Advantest 6857.T climbed 3.5%, following a 6.6% tumble on Wednesday.

The best performer among the Tokyo Stock Exchange's 33 industry groups was oil and coal producers .IPETE.T, which advanced 3.6% on firmer crude prices.

However, Jefferies analysts warn that Japanese stocks will struggle to make much more headway amid Trump's global trade battles, with a 12-month target of 35,500 for the Nikkei.

"We expect mixed messaging to induce steep volatility in the near term and heightened uncertainty over the medium/long term," the analysts said in a report.

"The supply chain disruptions and capex delays could hurt global growth in the near term and have a disproportionate impact on Japan's earnings, given the high operating leverage."