August 24, 2018 / 7:08 AM / a month ago

Nikkei rises to 2-week high on weak yen, pharmaceuticals

* Nikkei snaps 3-week losing streak

* Trading on broader market thin

* Eisai, Daiichi Sankyo among notable gainers

* Paper sector pushed up by brokerage’s target price hike on co

By Ayai Tomisawa

TOKYO, Aug 24 (Reuters) - Japan’s Nikkei rose to more than two-week highs on Friday, buoyed by a weaker yen and gains in pharmaceuticals after a report that drugmaker Eisai moved forward its mid-term profit goal by one year.

The Nikkei share average ended 0.9 percent higher at 22,601.77 points, the highest closing level since Aug. 8. For the week, the benchmark index soared 1.5 percent, snapping a three-week losing streak.

The weaker yen triggered futures buying in late trade.

The dollar comfortably stayed above 111 yen, after gaining nearly 0.7 percent against the Japanese currency after the U.S. Federal Reserve’s minutes showed officials discussed raising rates soon.

“As you can see that seasonal thin trade still continues, today’s market was mainly supported by futures buying,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.

The broader Topix advanced 0.7 percent to 1,709.20, with only 983.8 million shares changing hands, compared to last week’s daily average of 1.3 billion shares.

Eisai Co surged 2.7 percent, after the Nikkei business daily reported that the drugmaker is expected to post an operating profit of 102 billion yen ($923.16 million) in the year ending March 2020, moving one year forward its mid-term business plan.

Other drugmakers followed suit. Chugai Pharmaceutical surged 2.4 percent and Daiichi Sankyo added 2.8 percent.

The pulp and paper products sector also attracted buyers and rose 2.7 percent. Oji Holdings soared 3.7 percent to 739 yen after SMBC Nikko Securities raised its target price to 940 yen from 880 yen saying that strength in cardboard box prices and pulp prices will likely to continue midterm.

Nippon Paper Industries gained 1.7 percent.

On the other hand, Shimamura Co tumbled 3.7 percent after its August same-store sales dropped 5.6 percent on the year as typhoons kept shoppers at home, falling for a four consecutive month.

Meanwhile, as expected, Sino-U.S. trade talks ended on Thursday with no major breakthrough as the two sides escalated their trade war, activating more tariffs on each country’s goods.

Many trade-reliant Asian economies are worried they will suffer collateral damage if the dispute drags on and disrupts Chinese demand.

“The market knew that there would not be a solution proposal out of the low-level talks this time, so we can say that it was somewhat expected,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

Analysts said that investors’ focus has shifted to a speech by Federal Reserve Chairman Jerome Powell later in the day at an annual meeting of central bankers in Jackson Hole, Wyoming. Markets are looking for clues on the extent of further interest rates rises. ($1 = 110.4900 yen) (Editing by Kim Coghill)

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