Nikkei rallies as Fed rate cut hopes lift sentiment, cyclical stocks

* All of Topix's 33 subsectors in positive territory
* Nikkei posts biggest daily gain in 2-1/2 months
* Exporters, banks soar
* Fast Retailing falls on weak same-store sales at Uniqlo

By Ayai Tomisawa
TOKYO, June 5 (Reuters) - Japan's Nikkei rebounded sharply
on Wednesday morning thanks to a rally in U.S. stocks after U.S.
Federal Reserve Chairman Jerome Powell signalled a possible rate
cut in a boost to riskier assets.
The Nikkei share average .N225 rose 1.9% to 20,785.71 in
midmorning trade, posting the biggest daily percentage gain
since March 26.
All of the Topix's 33 subsectors were in positive territory,
with the broader Topix .TOPX also jumping 1.8% to 1,526.26.
Powell said the central bank would act "as appropriate" to
address trade war risks a day after St. Louis Fed chief James
Bullard said a rate cut may be warranted soon. Powell said the
Fed was "closely monitoring the implications" of a trade dispute
that has disrupted global markets. Analysts said that investors are buying back recently
battered stocks such as exporters and financial firms, though
they caution developments in the trade war will have the
ultimate say in future price moves.
"The market knows that even if the Fed cuts rates, global
trade tensions won't be resolved easily," said Yutaka Miura, a
senior technical analyst at Mizuho Securities, adding that the
Fed's message was positive for investors.
Machinery makers and automakers regained some lost ground,
with Fanuc Corp 6954.T up 3.2%, Yaskawa Electric Corp 6506.T
jumping 4.7%, Advantest Corp 6857.T rising 3.8% and Toyota
Motor Corp 7203.T advancing 2.3%.
Banks and insurers, which hunt for higher yielding products
such as foreign bonds, also attracted buyers. Mitsubishi UFJ
Financial Group 8306.T rose 2.2% and Dai-ichi Life Holdings
8750.T rallied 3.1%.
SoftBank Group Corp 9984.T jumped 2.8% after it said on
Tuesday it expects to book around 1.2 trillion yen ($11.12
billion) in pre-tax profit on the sale of shares in China's
Alibaba Group Holding Ltd BABA.N . Fast Retailing 9983.T underperformed the market, falling
1% after the company said that its same-store sales at its
Uniqlo clothing outlets in Japan fell 1.8% in may on the year.



(Editing by Shri Navaratnam)