* Defence equipment makers rise after Trump cancels Pompeo’s visit to North Korea
* Tech, auto stocks attract buying
By Ayai Tomisawa
TOKYO, Aug 27 (Reuters) - Japan’s Nikkei ended at a 10-week high on Monday, taking a positive cue from Wall Street after the U.S. Federal Reserve Chairman Jerome Powell affirmed that the Fed was sticking with its strategy of gradual rate hikes to protect economic growth.
The Nikkei share average ended 0.9 percent higher at 22,799.64, the highest closing level since June 15.
Japanese stocks followed gains in U.S. shares, with all but the mining, shipping and airline sectors in positive territory. Exporters such as automakers and tech companies led the gains.
“A strong U.S. economy is good news to Japanese companies as they rely on U.S. demand,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
Speaking at a research symposium in Jackson Hole, Wyoming, Powell said the Fed’s gradual interest rate hikes were the best way to protect the economic recovery, maintain strong job growth and keep inflation under control.
His comments pushed the S&P 500 and the Nasdaq to record highs on Friday.
Toyota Motor Corp surged 2.0 percent, Honda Motor Co added 1.4 percent, Tokyo Electron advanced 2.0 percent and TDK Corp rose 2.7 percent.
Also attracting buyers were defence equipment makers as investors speculated that geopolitical tension would rise after U.S. President Donald Trump abruptly cancelled his top diplomat’s planned trip to North Korea on Friday.
IHI surged 3.3 percent and Hosoya Pyro-Engineering Co soared 2.9 percent. Ishikawa Seisakusho ended 0.2 percent higher after climbing as high as 4.4 percent.
These stocks tend to rise in short-term trade when investors take the view that international political tensions may escalate.
Trump partly blamed China for the lack of progress with North Korea and suggested that talks with Pyongyang, led so far by Secretary of State Mike Pompeo, could be on hold until after Washington resolved its bitter trade dispute with Beijing.
The broader Topix soared 1.2 percent to 1,728.95. (Editing by Simon Cameron-Moore)