Tokyo stocks rise on hopes for U.S.-China deal, potential lifting of state of emergency

SYDNEY, May 8 (Reuters) - Japanese shares advanced on
Friday, in line with Wall Street's gains, as news of top trade
representatives of China and the United States holding a phone
talks calmed investors worried about simmering Sino-U.S.
tensions, with cyclicals leading the rally.
On the domestic front, hopes for a potential lifting of
Japan's state of emergency in some areas before the nationwide
deadline of May 31 also supported investors' risk appetite, said
traders.
The benchmark Nikkei average .N225 climbed 2.6% to a
one-week closing high of 20,179.09. The index was up 2.9%,
rising for a second week, although there were only two trading
days this week due to public holidays.
Top U.S. and Chinese trade representatives discussed their
Phase 1 deal over the phone on Friday, with China saying they
agreed to improve the atmosphere for its implementation and the
United States saying both sides expected obligations to be met.
Japan's economy minister Yasutoshi Nishimura said on Friday
that more prefectures were reporting zero coronavirus cases on a
daily basis and lifting the state of emergency for those regions
before the nationwide deadline was within sight. Meanwhile, Wall Street's thee major indexes climbed on
Thursday, with the Nasdaq .IXIC advancing 1.4% to erase losses
for 2020. .N E-mini futures for the S&P 500 index ESc1 was
last quoted 1.4% higher in late Asian trade.
The broader Topix .TOPX gained 2.2% to 1,458.28, with all
but one of the 33 sector sub-indexes on the Tokyo exchange
finishing in positive territory.
Highly cyclical iron and steel .ISTEL.T , non-ferrous
metals .INFRO.T and sea transport .ISHIP.T were the top
three performing sectors on the main bourse.
Nippon Steel Corp 5401.T and JFE Holdings Inc 5411.T
jumped 7.1% and 7.5%, respectively, while Nippon Yusen KK
9101.T rose 3.7%.
Taking a positive cue from Sino-U.S. phone talks and Chinese
peers .SSEC , China-related shares listed on the Tokyo Exchange
also outperformed, with Fanuc Corp 6954.T rising 3.7%, Komatsu
Ltd 6301.T up 2.9% and Hitachi Construction Machinery Co Ltd
6305.T advancing 3.9%.
Nintendo Co Ltd 7974.T lost 3.9% as investors took profits
after the company's fourth-quarter profit soared 200% due to
surging demand for its Switch games console and popularity of
its "Animal Crossing: New Horizons" title.
The Japanese gaming giant forecast a 22.7% fall in its net
profit for the current business year through March 2021, which
many analysts view as "too conservative." Other notable movers include the TSE REIT index .TREIT ,
surging 5.2% to its highest closing level since March 13.
Elsewhere, the index of Mothers start-up shares .MTHR
retreated 2.0%, after hitting a near three-month high on
Thursday, with biopharma AnGes Inc 4563.T nosediving 24.7%.