SYDNEY, June 4 (Reuters) - Japanese stocks closed at their highest in more than three months on Thursday, underpinned by a weaker yen and signs of an economic rebound from a coronavirus-led slump, but the rally lost some steam as profit-taking set in.
The benchmark Nikkei average ended up 0.4% at 22,695.74 points, its highest close since Feb. 21, after flitting between positive and negative territories earlier.
On Wednesday, data showed U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen, which helped propel all the three major indexes on Wall Street.
In the currency market, the safe-haven yen weakened, with the dollar/yen hitting a fresh two-month high of 109.10 yen on Thursday and the euro/yen touching a 4-1/2-month high of 122.625 yen overnight.
As a softer yen boosts Japanese manufacturers’ profits made abroad when repatriated, shares of blue-chip exporters were in demand. Toyota Motor rose 0.9%, Sony Corp added 1.6% and Murata Manufacturing gained 2.2%.
The broader Topix added 0.3% to 1,603.82, its highest close since Feb. 26, with about two-thirds of the 33 sector sub-indexes on the Tokyo exchange finishing higher.
Financial stocks rose, with insurance and banking among the best-performing sectors on the main bourse. Tokio Marine Holdings advanced 2.8% and Mitsubishi UFJ Financial Group (MUFG) climbed 1.4%.
NEC Corp jumped 3.8% after media reported that British officials have discussed supplies of 5G networking equipment with the Japanese firm and South Korea’s Samsung Electronics as part of a bid to develop alternatives to China’s Huawei Technologies.
Leopalace21 slumped 13.6% as the apartment development and leasing company cut its earnings estimates for the financial year ended in March due to special losses. It will release a full earnings report on Friday.
Elsewhere, the index of Mothers start-up shares dropped 1.3%, having marked its 1-1/2-year peak earlier this week. (Reporting by Tomo Uetake; Editing by Arun Koyyur and Aditya Soni)