Nikkei gains as trade tensions ease; Apple suppliers, chip-related shares outperform

By Tomo Uetake

TOKYO, Aug 20 (Reuters) - Japan's Nikkei rose for a third straight day on Tuesday as investors tiptoed back into equities amid signs of a slight easing of trade tensions between the United States and China.

Hopes for fresh stimulus moves by major economies also boosted riskier assets.

On Monday, Washington extended a reprieve that permits China's Huawei Technologies to buy components from U.S. companies by 90 days, to supply existing customers.

The Nikkei share average rose 0.6% to 20,677.22 points, while the broader Topix added 0.8% to 1,506.77.

"It's like an extension of yesterday's rally -- largely buoyed by short-covering although the moves seemed to lack strong conviction," said a Tokyo-based investment manager.

Investors were growing cautious ahead of the U.S. Federal Reserve's Jackson Hole symposium and G7 (Group of Seven) summit later in the week, he said.

On Wall Street, all three major stock indexes gained overnight, with Apple (AAPL) jumping 1.9% to provide the biggest boost to the Nasdaq.

That helped Tokyo-listed Apple (AAPL) suppliers, with Taiyo Yuden and TDK Corp (TTDKF) rising 1.6% and Foster Electric advancing 1.4%.

After speaking with Apple's (AAPL) chief executive Tim Cook on Sunday, U.S President Donald Trump said the CEO "made a good case" that tariffs could hurt Apple (AAPL), given that Samsung's products would not be subject to those same tariffs.

Tokyo-listed chipmaking-related firms also got a boost after the U.S. Philadelphia semiconductor index climbed 1.9% on Monday as Huawei's U.S. chip suppliers, such as Micron Technology (MU), rose.

Semiconductor manufacturing equipment maker Screen Holdings (DINRF) surged 5.4% and chipmaking equipment supplier Tokyo Electron (TOELF) rallied 1.4%.

Rate-sensitive TSE REIT index rose 0.3%, extending its winning streak to an eighth day to hit its fresh 12-year highs since 2007.

Real estate was the best performing sector among the Tokyo market's 33 subindexes, with both Mitsui Fudosan (MTSFF) and Mitsubishi Estate (MITEF) up 1.7%.

Hopes for additional stimulus helped sentiment after media reports said Germany is prepared to increase fiscal spending, and after the People's Bank of China took steps to lower corporate borrowing costs by setting a new lending reference rate.

Turnover on the Tokyo Stock Exchange's main board was thin at 1.58 trillion yen, well below its daily average of 2.33 trillion yen over the past year. (Reporting by Tomo Uetake; Editing by Richard Borsuk & Kim Coghill)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.