TOKYO: Japan’s Nikkei share average finished higher on Tuesday, as investors cherry-picked banks on rate-hike bets and defence stocks after their European peers closed higher overnight, while a softer yen boosted exporters.
The Nikkei rose 0.3% to 39,270.40 in its second consecutive session of gains. The broader Topix also finished 0.3% higher, at 2,775.51.
Japanese stocks traded in recent ranges with US markets closed on Monday for a holiday, although a weaker yen supported buying of automakers and other exporter shares.
Toyota Motor ticked up 1.1%, while Mitsubishi Motors surged 6.9%.
Defence-related shares rallied, after their European peers gained on Monday as investors priced in the likelihood of increased military spending in the region.
Mitsubishi Heavy Industries added 2.7%, Kawasaki Heavy Industries climbed 4.7% and IHI Corp jumped 6.3%.
Rate-sensitive banks gained 1.6% as Japanese government bond yields hit fresh highs. Data on Monday showed the economy expanded more than expected in the fourth quarter, supporting the Bank of Japan’s plans to continue hiking rates.
Market participants now await remarks from BOJ board member Hajime Takata on Wednesday and the CPI report on Friday.