Japanese shares edge higher as gains in Toyota, Sony offset tech losses


TOKYO, Jan 5 (Reuters) - Japanese shares inched up on Wednesday, as gains in Toyota Motor (7203.T) and Sony Group (6758.T) were offset by weak performance of technology heavyweights and a sell-off in expensive growth stocks driven by rising U.S. Treasury yields.

By 0218 GMT, the Nikkei share average (.N225) was up 0.03% at 29,312.00, after falling into a negative territory multiple times, while the broader Topix (.TOPX) gained 0.36% to 2,037.25.

"With interest rates in the United States rising, investors sold companies whose PERs (price earnings ratio) were high. Those stocks are facing headwind," said Ikuo Mitsui, fund manager at Aizawa Securities.

"On the other hand companies with strong fundamentals have attracted investors. For example, Toyota is a favourable stock as its production is expected to recover this year and the weakened yen could boost its earnings."

Toyota, up 2.15%, extended its rally after the automaker outsold General Motors (GM.N) in the United States in 2021, marking the first time that the Detroit automaker has not led U.S. auto sales for a full year since 1931. read more

Sony Group (6758.T) rose 3.24% as the game maker said it would set up a new company for electric vehicles this spring. read more

Insurance sector (.IINSU.T), up 2.72%, was the top gainer among the exchange's 33 industry subindexes, on hopes that rising rates were likely to boost profits.

Technology heavyweights fell, with chip-equipment maker Tokyo Electron (8035.T) falling 0.92% and medical services platform M3 (2413.T) losing 3.64%. Medical equipment maker Terumo fell 1.6%.

Komatsu (6301.T), up 4.56%, was the best performer on the Nikkei, followed by Mitsui Chemicals (4183.T), gaining 3.87%.

Daiichi Sankyo (4568.T) and Z Holdings Corp were among the worst performers on the Nikkei, falling 3.72% and 3.48%, respectively.

Reporting by Junko Fujita; Editing by Rashmi Aich

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