August 22, 2018 / 3:19 AM / a month ago

Nikkei rises supported by tech shares; telecom shares volatile

* Suruga Bank nosedives on worries about massive improper lending

* U.S. futures fall

By Ayai Tomisawa

TOKYO, Aug 22 (Reuters) - Japan’s Nikkei rose on Wednesday morning supported by tech shares, which tracked gains in their U.S. peers, while telcos were volatile on worries that their mobile fees will be cut.

The Nikkei share average rose 0.5 percent to 22,321.14 at the midday break after dipping into negative territory briefly. Weighing on sentiment were declines in U.S. futures after U.S. President Donald Trump’s former personal lawyer, Michael Cohen, pleaded guilty to campaign finance violations and other charges.

S&P e-mini futures were down 0.4 percent.

Nobuhiko Kuramochi, a strategist at Mizuho Securities, said most investors remained on the sidelines ahead of the U.S.-China trade talks, which are due to begin later on Wednesday in Washington.

But he said the impact of the meeting on market sentiment is likely be limited, as important decisions are not expected to be made at this meeting.

“Since it’s low-level talks, investors expect that this meeting will pave the way for November, when both countries’ presidents will meet,” Kuramochi said.

Market analysts also said risk sentiment remains supported as the dollar stayed above the psychologically important level of 110 yen for now.

Tech shares outperformed, with Advantest Corp surging 2.0 percent and Tokyo Electron soaring 2.1 percent.

Exporters gained ground, with Honda Motor Co rising 1.6 percent and Komatsu Ltd soaring 2.7 percent.

On the other hand, Japan’s top wireless carriers, NTT Docomo Inc, KDDI Corp and SoftBank Group Corp were volatile. Some continued to slide after a senior telecoms ministry source told Reuters that Japan is aiming to force wireless carriers to cut monthly fees and stop bundling the cost of smartphones with wireless services.

NTT Docomo fell as much as 3.3 percent in early trade before rising 0.2 percent and KDDI shed 1.5 percent. SoftBank dropped as much as 3.1 percent in early trade but closed the morning session up 1 percent.

They fell by up to 5 percent on Tuesday after Japan’s Chief Cabinet Secretary Yoshihide Suga was quoted by Kyodo News as saying that they have room to slash wireless fees by 40 percent.

Suruga Bank nosedived 20 percent and was the biggest percentage loser on the board after the Nikkei business daily reported that an investigation revealed that the bank’s improper lending amounted to 1 trillion yen.

The broader Topix advanced 0.7 percent to 1,696.66.

Editing by Sam Holmes

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