Drug makers help Nikkei scale fresh 3-decade high

TOKYO: Japan's benchmark Nikkei share average recovered from early falls on Tuesday to hit a fresh three-decade high, with drug makers leading the charge following a report of another effective COVID-19 treatment.

The Nikkei 225 Index was up 0.14% at 28,177.81 by 0204 GMT, while the broader Topix was down 0.05% to 1,853.96.

"Investors bought back stocks as soon as the market started falling, showing the fundamental strength of demand," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

"They got confidence in the market as US futures rose overnight."

Chugai Pharmaceutical surged almost 7% after a report said one of its drugs was effective for COVID-19 treatment, helping boost the drug maker index by 1.52%.

Takeda Pharmaceutical rose 3.22%, Eisai climbed 2.91%, and Shionogi & Co added 1.51%.

Retail stocks also gained, led by a 9% surge in Ryohin Keikaku after the Muji retail stores operator posted a 69% jump in quarterly net profit. Lawson rose 3.86% and Watts Co jumped 9.3%.

Automakers slid after Toyota Motor and Honda Motor said they would cut vehicle production this month due to a shortage of semiconductors.

Toyota Motor fell 1.08% and Honda Motor declined 1.35%.

Meanwhile, semiconductor shares rose on prospects of stronger chip demand, with Tokyo Electron adding 0.66% and Shin-Etsu Chemical climbing 3.13%.

The underperformers among the Topix 30 included Nippon Telegraph and Telephone Corp, which was down 2.17%, and Seven & i Holdings Co Ltd, which lost 1.58%.