Japan Financial Markets

TOKYO: Japan’s Nikkei ended higher in choppy trade on Tuesday as tech shares and machinery stocks outperformed while Sony jumped after Reuters reported that US hedge fund Third Point was building up its stake in the company to push for changes.

The Nikkei share average ended 0.2 per cent higher to 21,802.59.

The Nikkei was trading in negative territory earlier, but it turned slightly positive thanks to a rally in cyclical stocks as recent strong Chinese economic data has supported sentiment, traders said.

They still expected the index to stay in a rangebound as investors wanted more clarity on the state of US-China trade talks and remained cautious ahead a flood of corporate earnings. “The Nikkei has risen to a level where it needs more positive catalysts from companies’ earnings,” said Shogo Maekawa, global market strategist at JPMorgan Asset Management. “Companies need to show growth stories to convince investors that the Japanese market deserves further gains.”

On Thursday, Yaskawa Electric will start this month’s parade of earning reports for the year ended March 31. The automation equipment maker, whose shares gained 1.8 per cent, is closely followed because it has large exposure to China.

The broader Topix shed 0.1 per cent to 1,618.76, with defensive sectors such as utilities, real estate and construction underperforming.

Tokyo Electric Power Co tumbled 2.9 per cent, Mitsui Fudosan declined 1.5 per cent and Kajima Corp dropped 1.0 per cent.

Tech shares, machinery and chip equipment stocks advanced after the Philadelphia SE Semiconductor Index rose overnight. TDK Corp surged 1.9 per cent, Fanuc Corp soared 2.3 per cent, Tokyo Electron advanced 1.0 per cent and Advantest Corp jumped 3.9 per cent.

Sony Corp shares jumped 9.3 per cent after sources told Reuters that Third Point, which has about $14.5 billion in assets under management, is raising a dedicated investment vehicle to target between $500 million and $1 billion to buy more Sony shares.

Makers of currency processing machinery soared after local media reported that Japan is planning to introduce new 10,000, 5,000 and 1,000 yen bills.

Electronic control equipment maker Takamisawa Cybernetics Co jumped 28 per cent and currency processing machine maker Glory Ltd soared 7.9 per cent.

NHK reported that the government’s decision to issue new banknotes comes before the start of the new Imperial era, Reiwa, on May 1, when Crown Prince Naruhito ascends to the throne.