July 27, 2018 / 8:07 AM / 5 months ago

Nikkei ends higher; eyes on global trade, BOJ meeting

* Nikkei ends session at a one-week high

* Kao jumps 2.9 pct on solid earnings results

* Nomura plunges after April-June profit dives 91 pct

By Tomo Uetake and Daniel Leussink

TOKYO, July 27 (Reuters) - Japanese shares closed higher on Friday, taking comfort from signs of rapprochement between the United States and Europe over trade issues, though investors remained cautious ahead of next week’s Bank of Japan policy review.

The benchmark Nikkei share average hit a one-week closing high of 22,712.75, and ended the week 0.56 pct firmer.

“Worries over trade problems have somewhat faded. Above that, the market moved into a positive direction overall, while earnings were mixed,” said Chihiro Ohta, general manager of investment research, SMBC Nikko Securities.

While investors were comforted by an informal agreement between the European Union and the United States to hold off on tariffs, speculation about changes to the Bank of Japan’s policy at next week rates review checked optimism.

The EU-U.S. news sent the MSCI’s gauge of stocks across the globe to four-month highs on Thursday, while shares of European automakers gained as fears of a transatlantic trade war slowly eased.

Cyclical shares, which had been bruised by concerns over a Sino-U.S. trade war, led the gains.

Chipmakers Tokyo Electron and Canon Inc ended down 0.16 and 0.17 percent, respectively, after the earnings disappointed investors.

Nomura Holdings closed 5.79 percent down after Japan’s biggest brokerage and investment bank posted its worst quarterly performance in more than two years.

Cosmetics firm Kao Corp and food and beverage manufacturer Yakult posted upbeat earnings, and ended the session 2.86 percent and 6.59 percent higher, respectively.

Other notable movers include internet ad firm Septeni Holdings, which dived 21.25 percent to become the worst performer among all Tokyo-listed stocks, after Facebook suffered the biggest one-day wipeout in the U.S. stock market history.

Investors were keeping tabs on the Bank of Japan (BOJ) meeting on Monday and Tuesday for direction, amid speculation the central bank could wind back its purchases in the Nikkei-linked exchange-traded funds.

Reuters and other media reported over the weekend that the BOJ could debate monetary policy changes at its meeting early next week, with potential tweaks to its interest rate targets and stock-buying techniques on the table.

Katsunori Kitakura, lead strategist at Sumitomo Mitsui Trust Bank, said he does not expect any changes to BOJ policy at next week’s meeting.

However, “there is a possibility that the BOJ will make an announcement that it has begun discussions to provide suitable ranges for a target yield curve after the coming meeting,” he said.

The broader Topix ended 0.57 percent firmer at 1,775.76, while the JPX-Nikkei Index 400 closed up 0.55 percent at 15,694.70. (Reporting by Tomo Uetake, Editing by Shri Navaratnam and Sherry Jacob-Phillips)

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