Nikkei jumps to 13-month high as U.S.-China trade hopes brighten mood

By Tomo Uetake

TOKYO, Nov 5 (Reuters) - Japan's benchmark Nikkei share

average leaped to 13-month highs on Tuesday after a long

weekend, as U.S. and Chinese trade negotiators moved closer to

sealing a preliminary deal and upbeat Wall Street stocks lifted

investor sentiment.

Broad-based buying sparked a 1.8% rally in the Nikkei

average .N225 to 23,251.99, its highest close since Oct. 10 of

last year. The broader Topix .TOPX advanced 1.7% to 1,694.16,

its best finish in more than a year.

On Monday, all three major stock indexes on Wall Street

finished at record highs on increasing signs the United States

and China are inching closer to a truce in their trade war and

on optimism solid consumer-driven growth will underpin the U.S.

economy. .N/C

U.S. S&P 500 futures ESc1 gained as much as 0.3% in Asian

trade on Tuesday after the Financial Times reported that the

United States is considering dropping some tariffs on China.

They were last up 0.2%.

China is pushing U.S. President Donald Trump to remove more

tariffs imposed in September as part of a "phase one" U.S.-China

trade deal, expected to be signed later this month, people

familiar with the negotiations said on Monday. The report came after Beijing and Washington spoke of

progress in trade talks on Friday and U.S. Commerce Secretary

Wilbur Ross said licenses for U.S. companies to sell components

to China's Huawei Technologies will come "very shortly".

"Political uncertainties are receding. That means those who

had held off their activities, both in the real economy and

financial markets, are getting active," said Masaru Ishibashi,

joint general manager of trading at Sumitomo Mitsui Bank.

On the data front, U.S. non-farm payrolls released on Friday

slowed less than expected in October as the drag from a strike

at General Motors GM.N was offset by gains elsewhere, offering

some assurance that consumers would continue to support the

slowing economy. In Tokyo, China- and semiconductor-related companies led the

gains on Tuesday.

Construction machinery makers Komatsu 6301.T and Hitachi

Construction 6305.T climbed 5.4% and 5.1%, respectively, while

Kobe Steel 55406.T added 2.8%.

Chip-related SUMCO 3436.T advanced 3.1%, while Rohm

6963.T and Renesas Electronics 6723.T surged 5.1% and 7.0%,

respectively.

The Nikkei's heavyweight SoftBank Group 9984.T rallied

2.4% to become the second-most traded stock on the Tokyo's main

board.

The investment conglomerate said on Friday it would book a

277 billion yen ($2.5 billion) gain in the second quarter after

portfolio company Alibaba Group Holding BABA.N recorded a $9.7

billion gain related to its stake in Ant Financial. Z Holdings 4689.T , formerly known as Yahoo Japan Corp,

soared 16.4% after the e-commerce firm's operating profit rose

by 11.2% year-on-year in the July-September quarter.

Elsewhere, Fujifilm Holdings 4901.T climbed 6.7% after the

Wall Street Journal reported that Xerox XRX.N has agreed to

sell its 25% stake in the joint venture, Fuji Xerox, to Fujifilm

for $2.2 billion, citing sources. The two companies

announced the ending of the 57 year-old joint venture after the

market close. = 108.6600 yen)