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Japanese shares inch up led by cheap tech shares, COVID-19 measures cap gains

·2-min read

TOKYO, May 7 (Reuters) - Japanese shares erased early losses and edged up on Friday as investors scooped up cheap technology stocks, while concerns around the slow recovery due to the extension of COVID-19 emergency measures capped gains.

The Nikkei share average gained 0.3% to 29,419.23 by 0207 GMT, and the broader Topix rose 0.53% to 1,937.56. Both indexes inched down earlier in the session following their biggest percentage gain in two weeks on Thursday.

"The market rose too much yesterday so investors sold shares to book profits, but as soon as the indexes fell, they quickly started looking for bargains, particularly those which reported positive earnings," said Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities.

"But the gain was limited as investors were concerned that it could take some more time until Japan's economy will be normalized due to the extension of the state of emergency."

The Japanese government is seeking to extend a state of emergency in Tokyo and three other areas until the end of May to curb a surge in coronavirus cases.

The technology sector advanced, with heavyweight Tokyo Electron jumping 2.79% as investors took a second look at the positive outlook of the chip making equipment maker.

Semiconductor test equipment supplier Advantest rose 1.96%, while robot maker Fanuc gained 0.94%.

On the other hand, Nintendo lost 2.52% after the game maker forecast annual sales of its Switch console to fall 11.5%.

Hitachi, up 1.91 %, was the biggest gainer among the top 30 core Topix names, followed by Tokio Marine Holdings , which rose 1.64%.

The underperformers among the Topix 30 were Nintendo, followed by Sony Group, losing 1.21%.

There were 168 advancers on the Nikkei index against 57 decliners. (Reporting by Junko Fujita; Editing by Krishna Chandra Eluri)

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