Top Stories
Top Stories
Wires

Japanese stocks gain, strained S.Korea ties lift defence sector

Shinichi Saoshiro

* Nikkei climbs 0.4%, up 1.4% on the week

* Weaker yen, gains by Chinese, U.S. shares provides support

* Gains limited before Fed Chair Powell's speech

TOKYO, Aug 23 (Reuters) - Japanese stocks rose on Friday, drawing support from a weaker yen, firmer Chinese and U.S. markets, and a jump in domestic defence shares as ties with South Korea sour further.

The Nikkei share average ended the day 0.4% higher at 20,710.91 points. It was up 1.4% for the week.

The dollar edged higher versus the yen on Friday on expectations a pivotal speech by Federal Reserve Chairman Jerome Powell later in the day will reinforce that the U.S. central bank has not entered into an extended rate cutting cycle.

Wall Street's main indexes eked out gains overnight, followed by an advance in Chinese stock markets on Friday.

"The yen's depreciation has underpinned the domestic equity market, which gained follow through support from advancing Chinese stocks," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

Shares of exporters climbed in response to a weaker yen, with Tokyo Electron gaining 1%, Subaru Corp adding 1.6% and Honda Motor Co rising 0.5%.

Travel services provider H.I.S. Co advanced 3.8% after Nikkei Business reported that it plans to withdraw from a financially taxing takeover bid for hotel operator Unizo Holdings, which has received a higher offer from an investment group.

Shares linked to the defence industry gained a day after Japan's diplomatic row with South Korea escalated. South Korea on Thursday opted to scrap an intelligence-sharing pact with Japan, deepening a dispute which has undercut security cooperation over North Korea.

Defence equipment maker Ishikawa Seisakusho Ltd rose 3.5% and Howa Machinery Ltd, which makes firearms, gained 4.3%. Defence communication equipment manufacturer Tokyo Keiki Inc advanced 1.7%.

But Hanatour Japan Co, which operates holiday tours to Japan from South Korea, was down 1.6% as increasing friction between Seoul and Tokyo are expected to reduce inbound tourism.

Mitsubishi Pencil Co climbed 6.8% after it announced a buy back of up to 1.68% of its own shares through March 24, 2020.

The largest percentage gainer in the index was FamilyMart UNY Holdings Co Ltd, which was up 6.1%. The biggest percentage loser was Taiyo Yuden Co Ltd, which declined 3.4%.

There were 145 advancers on the Nikkei index against 72 decliners.

The broader Topix gained 0.28% to 1,502.25.

The volume of shares traded on the Tokyo Stock Exchange's main board was 0.91 billion, compared to the average of 1.12 billion yen in the past 30 days.

(Editing by Kim Coghill)