August 22, 2018 / 6:51 AM / 3 months ago

Nikkei closes higher supported by tech shares; telecom shares volatile

* Suruga Bank nosedives after report of heavy improper lending

* Mood dips as U.S. futures fall on news of Cohen’s guilty pleas

By Ayai Tomisawa

TOKYO, Aug 22 (Reuters) - Japan’s Nikkei closed higher on Wednesday supported by tech shares, which tracked gains in their U.S. peers, although telcos were volatile on news the government wanted to cut their mobile phone fees and stop handset bundling.

The Nikkei share average gained 0.64 percent to end the day at 22,362.55 after briefly dipping into negative territory early in the session.

Weighing on sentiment were declines in U.S. futures after Michael Cohen, U.S. President Donald Trump’s former personal lawyer, pleaded guilty to campaign finance violations and other charges.

S&P e-mini futures were down about 0.3 percent as of 0600 GMT.

Nobuhiko Kuramochi, a strategist at Mizuho Securities, said most investors remained on the sidelines ahead of the U.S.-China trade talks, which are expected to begin later on Wednesday in Washington.

But he said the impact of the meeting on market sentiment is likely be limited, with important decisions not expected to be made at this meeting.

“Since it’s low-level talks, investors expect that this meeting will pave the way for November, when both countries’ presidents will meet,” Kuramochi said.

Though dealers had earlier cited speculation that the talks could set the stage for a meeting between the two leaders, Trump has cast doubt on whether he will meet Chinese President Xi Jinping during an international Asia-Pacific summit in Papua New Guinea in November.

Market analysts also said risk sentiment remains supported as the dollar stayed firmly above the psychologically important level of 110 yen.

Tech shares outperformed, with Advantest Corp surging 1.6 percent and Tokyo Electron soaring 2.4 percent.

Exporters gained ground, with Honda Motor Co rising 1.9 percent and Komatsu Ltd gaining 2.4 percent.

On the other hand, Japan’s top wireless carriers, KDDI Corp , NTT Docomo Inc and SoftBank Group Corp were volatile. Some continued to slide after a senior telecoms ministry source told Reuters that Japan is aiming to force wireless carriers to cut monthly fees and stop bundling the cost of smartphones with wireless services.

KDDI closed 1.9 percent lower while NTT Docomo shed 0.6 percent, making up some losses after falling as much as 3.3 percent in early trade. SoftBank dropped as much as 3.1 percent in early trade but finished the day 1.3 percent higher.

They fell by up to 5 percent on Tuesday after Japan’s Chief Cabinet Secretary Yoshihide Suga was quoted by Kyodo News as saying that they have room to slash wireless fees by 40 percent.

Suruga Bank plummeted 19.5 percent and was the biggest percentage loser on the board after the Nikkei business daily reported that an investigation revealed that the bank’s improper lending amounted to 1 trillion yen.

The broader Topix advanced 0.77 percent to 1,698.37.

Additional reporting by Daniel Leussink in Tokyo, editing by Sam Holmes and Eric Meijer

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