Japan's Nikkei rises for a second day as trade fears ease, Nippon Steel jumps

TOKYO, May 26 (Reuters) - Japan's Nikkei share average gained for a second-straight session on Monday as easing trade tensions between the United States and Europe supported risk appetite.

Nippon Steel 5401.T jumped as much as 7.4% after United States President Donald Trump appeared to give his blessing to the company's protracted takeover of U.S. Steel. Demand for equities rose broadly after Trump extended a tariff deadline on Europe, another backtrack from his sweeping "Liberation Day" import duties announced last month.

The Nikkei 225 Index .N225 climbed 0.5% as of the midday break, while broader Topix .TOPX was up 0.25%. Japanese bonds also rallied after a dramatic week that saw super-long yields rise to records.

"The market is now becoming more and more doubtful about (the) seriousness of the tariff policy, particularly after (Trump) dropped the tariff rates on China," said Nomura chief macro strategist Naka Matsuzawa.

"The bond market started to stabilise after steepening quite a lot on the long end, rallying for two consecutive days, so I think that gave relief to the stock market as well," he added.

The Japanese yen remained near a one-month high against the U.S. dollar, curbing demand for export-related shares like Mazda Motor 7261.T, which lost 0.8%.

Nippon Steel pared its gains to just 1.6% at the break. The largest percentage gainers in the Nikkei were CyberAgent 4751.T up 4.4%, followed by Keisei Electric Railway 9009.T gaining 3.7%.

The biggest losers in the index were Konica Minolta 4902.T down 3.1%, followed by department store operators J.Front Retailing 3086.T and Isetan Mitsukoshi Holdings 3099.T, both down 2.9%.