Japan's Nikkei rises on US-China trade deal hopes
TOKYO, May 12 (Reuters) - Japan's Nikkei share average rose on Monday as indications of progress in U.S.-China trade talks boosted hopes of a deal between the major economies.
As of 0202 GMT, the Nikkei .N225 was up 0.2% at 37,573.27. The broader Topix .TOPX edged 0.02% higher at 2,734.09.
"Investors bought stocks on optimism that the trade talks between the U.S. and China made progress," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
"But gains were limited as they sold stocks on the rally. Both the Nikkei and Topix rose sharply, but those rallies were based just on expectations on the trade talk progress."
The Nikkei has risen about 20% from its close on April 7, when the index fell to a 1-1/2-year low after the announcement of U.S. sweeping tariffs.
The index traded more than 7% above the 25-day average on Friday, an indication that the market was overheated, said Maki Sawada, senior strategist at Nomura Securities.
The United States and China ended trade talks on a positive note on Sunday, with U.S. officials touting a "deal" to reduce the U.S. trade deficit, while Chinese officials said the sides had reached "important consensus" and agreed to launch another new economic dialogue forum.
Chip-testing equipment maker Advantest 6857.T jumped 4.3% to provide the biggest boost to the Nikkei.
Property developer Tokyu Fudosan 3289.T rose 5.18% after forecasting a record annual net profit of 85 billion yen ($582 million) for the year to March 2026.
Drug makers fell on concerns about falling drug prices after U.S. President Donald Trump said he would sign an executive order on reducing prescription drug and pharmaceutical prices.
Daiichi Sankyo 4568.T lost 5.44%. The pharmaceutical sector .IPHAM.T fell 4.3% to become the worst performer among the Tokyo Stock Exchange's 33 industry sub-indexes.
Nippon Steel 5401.T fell 4.94% after the steel maker said it expected net profit to slide 43% in the fiscal year ending March 2026.
($1 = 146.1000 yen)
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