* Nikkei, Topix up 1.6%; Topix closes chart gap
* Tech shares track gains in U.S. peers
* Domestic demand-related shares rise amid Middle East
tensions
By Hideyuki Sano
TOKYO, Jan 7 (Reuters) - Japanese shares rebounded on
Tuesday, with tech and domestic demand-oriented sectors leading
the gains, as investors were relieved at the absence of fresh
sabre rattling between the United States and Iran.
The Nikkei share average .N225 rose 1.60% to 23,575.72,
recovering much of its losses posted in the previous session,
though it failed to break above a resistance from 25-day moving
average at 23,614.
In a positive sign for bulls, the broader Topix .TOPX
gained 1.62% to 1,725.05, already closing the chart gap made
during the New Year holidays in just one day.
The mood calmed a little as there was no new aggression
after Iran and the United States traded threats following a U.S.
air strike killing a top Iranian commander, with Wall Street
ending in positive territory on Monday. MKTS/GLOB
"The markets are hoping that there will be no full-scale
military confrontation. The U.S. side probably doesn't want a
war in an election year, neither does Iran, which is already hit
by sanctions," said Masayuki Doshida, a senior market analyst at
Rakuten Securities.
A broad range of shares rallied, with 90% of shares on the
main board chalking up gains, the highest ratio since Sept 5,
2019.
Shares in kettle maker Zojirushi Corp 7965.T jumped 14.1%
to a record high after an official filing showed its top
shareholder changed the purpose of its investment.
Technology shares were in favour following their U.S. peers'
outperfomance on Monday.
Sony Corp 6758.T climbed 3.2% to its highest in 18-1/2
years on hopes of solid earnings, while Fujitsu 6702.T closed
at its strongest since 2006, riding on prospects of 5G wireless
sales' boost.
Yokogawa Electric 6841.T and FujiFilm Holding 4901.T
both gained 5.6% each.
Investors also flocked to domestic demand-oriented shares,
which are perceived to be less vulnerable to external shocks
such as the Middle East tension.
Retailer Seven&I Holdings 3382.T and Recruit Holdings
6098.T gained more than 2% each.
Recent IPO stocks fared well as Japanese retail investors
saw a chance for quick gains, given the firmness in start-up
shares in the past several months.
Cloud funding service operator Makuake Inc 4479.T rose
5.2%, while reuse business operator BuySell Technologies
7685.T climbed 6.2%. Both were listed last month.
The index of the Jasdaq start-up market .NOTC , which has
been rising steadily since September, rose 1.07%.