November 29, 2018 / 7:14 AM / 11 days ago

Nikkei gains as cyclical shares rally after Fed chairman's 'dovish' comment

* Mitsubishi Heavy falls on S.Korean court’s compensation ruling

* Markets hail Fed chairman’s dovish-sounding comments

* Exporters attract buyers despite stronger yen

By Ayai Tomisawa

TOKYO, Nov 29 (Reuters) - Japan’s Nikkei index rose on Thursday as emboldened investors bought global cyclical stocks after the Federal Reserve hinted it was near the end of its rate hike cycle.

But gains were trimmed by lingering concerns over the outcome of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Argentina this weekend, in which their trade tug-of-war is seen sure to feature.

The Nikkei share average gained 0.4 percent to 23,262.60.

On Wednesday, U.S. Federal Reserve Chair Jerome Powell said the central bank’s policy rate is now “just below” estimates of the neutral level that neither brakes nor boosts a healthy economy, comments many took as signalling the Fed’s three-year tightening cycle is drawing to a close.

Powell’s comments boosted U.S. stock markets and pulled the dollar down from two-week highs.

“One of the three main concerns in the market is easing so that’s helping stocks,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities, referring to the pace of the Fed’s rate hikes, U.S.-China trade tension, and a fall in oil prices.

Kuramochi said while a stronger yen is negative for Japanese exporters, the current dollar-yen level is still higher than where Japanese companies forecast the currencies would trade this fiscal year.

The dollar fell 0.4 percent versus the yen to trade at 113.31 Thursday.

Exporters attracted buyers, with Advantest Corp rising 2 percent, Sumco Corp gaining 2.1 percent and Nintendo Co surging 4.1 percent.

Kyocera Corp rose 3.2 percent after the manufacturer said it reached a settlement with Hemlock Semiconductor over long-term purchase agreements for the supply of polysilicon materials for harvesting solar energy.

But Mitsubishi Heavy Industries Ltd fell 1.3 percent after South Korea’s top court ruled on Thursday that the Japanese heavy machinery maker must compensate 11 South Koreans for their forced labour during World War Two.

The broader Topix advanced 0.4 percent to 1,659.47. (Reporting by Ayai Tomisawa, editing by Eric Meijer)

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