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* Nikkei has shed 2.1 for week, dropped 1 pct for month so far
* Nikkei poised to post 5.8 pct gain for quarter
* Announcement of new era name could trigger festive mood - analyst
By Ayai Tomisawa
TOKYO, March 29 (Reuters) - Japan’s Nikkei rose on Friday on optimism about the latest round of U.S.-China trade talks, with cyclical sectors such as shipping and machinery advancing on the last day of the fiscal year.
Daiichi Sankyo Co was in focus, jumping 16 percent to a daily-limit high of 5,100 yen after the drugmaker and AstraZeneca Plc have signed a potential multibillion-dollar collaboration to develop and sell Daiichi’s cancer drug trastuzumab deruxtecan.
The Nikkei share average rose 1 percent to 21,232.93 points by the midday break.
The benchmark index has fallen 1.8 percent for the week and 0.7 percent for the month. But for the quarter, it is poised for a 6.1 percent gain.
Shippers and machinery stocks gained ground, with Kawasaki Kisen soaring 2.3 percent, Fanuc Corp rising 1.0 percent and Yaskawa Electric surging 2.4 percent.
Worries about global economic growth rattled markets last week after the U.S. Federal Reserve abandoned projections for any interest rate hikes this year and the U.S. Treasury yield curve inverted for the first time since 2007.
“The Nikkei has been trading in a range bound recently and it may continue to stay that way for a while for two reasons,” said Shogo Maekawa, a global market strategist at JPMorgan Asset Management.
He said that cyclical stocks such as industrial names and machinery shares rebounded from their December lows and will likely stay intact on hopes that China will beef up measures to support its manufacturing industry. On the other hand, concerns about a U.S. economic slowdown will likely limit the market’s upside.
“If bad indicators from the U.S. show weakness in the housing market or consumption in the next few weeks, the market will be pressured. Otherwise the Nikkei should mostly stay between 20,500-21,500,” Maekawa said, adding that investors will also be focused on U.S.-China trade issues.
On Thursday, senior U.S. officials arrived in Beijing for a fresh round of trade talks, which will be followed by discussions in Washington next week.
Meanwhile, as Crown Prince Naruhito’s reign begins on May 1, Japanese authorities will announce the new era name a month earlier on April 1.
Although the direct impact on the market should be limited, positive sentiment for a new era and the declaration of an unprecedented 10-day public holiday may energize some retail investors, analysts said.
“We may not only see the mood to be festive, but see some stocks gaining on rising expenditure during the 10-day Golden Week holidays,” said Takuya Takahashi, a strategist at Daiwa Securities.
The “Golden Week” holiday will run from late April to early May.
“Travel agency stocks as well as rail road operators, hotel operators and airline stocks may be bought when we have more news about rising tourism demand,” Takahashi said.
The broader Topix rose 0.7 percent to 1,593.58. (Editing by Kim Coghill)