Japanese shares rise on solid Wall Street finish, banks gain on higher rates

TOKYO, Oct 20 (Reuters) - Japanese shares rose on Wednesday, underpinned by overnight strength on Wall Street, while higher U.S. Treasury yields lifted the country's brokerage and banking shares.

The Nikkei share average rose 0.59% to 29,388.84 by 0145 GMT, while the broader Topix gained 0.52% to 2,037.0.7

Wall Street jumped overnight, with the biggest boosts from the technology and healthcare sectors amid solid quarterly reports.

"Japanese shares appear to be cheap relative to the U.S market's strength. Investors are betting that if the U.S. market keeps its momentum, Japanese shares should rise as well," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute.

"Higher rates may not become a negative factor for technology shares because in the U.S., big tech shares gained despite rising U.S. Treasury yields."

In Japan, heavyweights advanced, with global start-up investor SoftBank Group (SFTBF) rising 1.84%, Uniqlo clothing shop operator Fast Retailing (FRCOF) gaining 1.24% and chip-making equipment maker Tokyo Electron (TOELF) advancing 0.73%,

Brokerages and banks also led the market, rising 2.13% and 2%, respectively, after the 10-year U.S. Treasury yield rose to its highest in over four months overnight.

Airlines rose 2% and railway operators advanced 1.61% on hopes for an economic recovery amid sharp falls in the number of new COVID-19 infections in the country.

Local media had reported the Tokyo government would lift restrictions for operating hours of certified restaurants from next week.

Hitachi (HTHIF) gained the most among the top 30 core Topix names, followed by Mizuho Financial Group (MFG).

Nintendo (NTDOF), down 3.50%, was the worst performer among the Topix 30, followed by Mitsubishi Corp (MSBHF), which lost 0.89%.

(Reporting by Junko Fujita; Editing by Krishna Chandra Eluri)

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