Nikkei snaps four-day losing streak on Powell's comments

BY Reuters | ECONOMIC | 12/01/22 01:42 AM EST

TOKYO, Dec 1 (Reuters) - Japan's Nikkei index snapped a four-session losing streak on Thursday after Wall Street rose sharply overnight as U.S. Federal Reserve Chair Jerome Powell struck a more dovish tone than the market had expected.

The Nikkei share average rose 0.92% to close at 28,226.08. But the index pared some of its early gains, with 62% of stocks trading on the Tokyo bourse's prime section closing in negative territory.

The broader Topix inched up 0.04% to 1,986.46.

Wall Street ended sharply higher on Wednesday after Powell said the central bank might scale back its pace of interest rate hikes as soon as December.

"Market participants are still cautious as they await U.S. employment data due out soon," said Takatoshi Itoshima, a strategist at Pictet Asset Management Japan.

"The market could go up or down once investors digest a slower pace of U.S. rate hikes later in the month," he said, referring to the Fed's upcoming policy decision.

"There could also be concerns about corporate earnings worsening on the back of a slowing economy."

The U.S. Labor Department's closely watched non-farm payrolls data is due on Friday.

Heavyweight chip-related shares closed higher, tracking an overnight jump in the Philadelphia Semiconductor index.

Tokyo Electron (TOELF) jumped 4% and Advantest (ADTTF) rose 4.38%. Technology investor SoftBank Group (SFTBF) climbed 1.6%.

Eisai (ESALF) jumped 4.75%, extending gains from the previous session, as the drugmaker plans to seek full approval for its experimental Alzheimer's drug lecanemab in the United States, Europe and Japan.

The insurance and banking sectors fell 1.95% and 1.59%, respectively, as U.S. Treasury yields declined.

Regional banking group Shizuoka Financial Group (SFGIF) fell 4.18% and was the biggest loser on the Nikkei, followed by insurer Sompo Holdings (NHOLF), which dropped 3.81%. (Reporting by Junko Fujita; editing by Uttaresh.V and Subhranshu Sahu)

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